Entrepreneurship as an urban event? Empirical evidence from European cities

Abstract

This paper investigates whether urban areas are more entrepreneurial than other parts of countries and to what extent the observed differences between cities are caused by individual characteristics and context effects. Using Global Entrepreneurship Monitor (GEM) data from 47 urban areas in 22 European Union member states, it is found that in particular opportunity-motivated (instead of necessity-motivated) entrepreneurship tends to be higher in urban areas. Adopting a multilevel framework focusing on 23 urban areas in 12 European Union countries, it is found that urban regions with high levels of economic growth and diversity of economic activities exhibit higher levels of opportunity-motivated entrepreneurial activity than their counterparts.