Capital allocation in the Greek regions

Abstract

The present study analyses the location of new economic activities in the 51 Greek prefectures (NUTS III level) as the outcome of agglomeration economies and other factors that are acknowledged as determinants of new firm location. Cross-section data referring to the location choices of firms in manufacturing, commerce, services and tourism within 2005 are used. Results indicate that agglomeration effects largely determine a region's attractiveness and appropriateness as an investment location. In addition, the effect of other factors such as demand, expected profit and cost conditions is identified as important. Interestingly, regional characteristics seem to affect in different ways the location of start-ups belonging to different industries.

Regional industrial path development: The role of new entrepreneurial firms

“…The literature seems to differ in this question of location determinacy. While parts of the entrepreneurship literature argue that entrepreneurs are to be considered as embedded actors which hardly ever consider localisation outside their own local community (Dahl and Sorenson, 2009;Fritsch, 2011), other parts of the literature argue differently when stating that entrepreneurs locate their business in regional contexts favouring the success of their new venture (Liargovas and Daskalopoulou, 2011).…”

“…Some examples in this respect are that regions can be more or less supportive to opportunity entrepreneurship (Petrakis and Kostis, 2014), more or less supportive to financing start-ups (Liargovas and Daskalopoulou, 2011), support technology transfer, global innovation relations and collective social capital differently by innovative and forward leaning ICT solutions (Liargovas and Daskalopoulou, 2011), they can vary in their policy support to entrepreneurship, in their knowledge infrastructure and their industrial structure (Isaksen, 2014;Isaksen and Trippl, 2016;Tödtling and Trippl, 2005), and they can vary in their cultural and embedded institutional support (Asheim and Isaksen, 2002).…”

“…A relevant question is why these two? Why not include other important micro variables like available resources as finance (Liargovas and Daskalopoulou, 2011) or knowledge (Komninos, 2009), or possible macro effects like entrance barriers (Porter, 1980) or industry life cycle stage (Phaal et al 2011)? First of all, these are certainly important variables in order to predict future success of the business, and therefore also important indicators to predict possible effects on future regional industrial development.…”

“…The main purpose of policy instruments aiming to increase the numbers of type D entrepreneurs would therefore be to lower entrepreneurial barriers and to seek to build a supportive entrepreneurial culture. Even if they are not sufficient (Davidsson and Wiklund, 1997), we know that supporting institutions and a well-functioning financial system are important building blocks in a supportive entrepreneurial culture (Acs et al 2008;Liargovas and Daskalopoulou, 2011). Firm type C and type B support regional path renewal either indirectly (firm C) or directly (firm B).…”

“…Granovetter, 1985;Jack and Anderson, 2002;Petrakis and Kostis, 2014;Van de Ven, 1993), entrepreneurship researchers tend to view both the entrepreneurs and their new firm formations as decontextualised entities (Alsos et al 2014). In this string of research, entrepreneurs seek to increase their chances of entrepreneurial success by optimising their new firm location (Liargovas and Daskalopoulou, 2011) and as so, entrepreneurs contribute to increased regional interaction and knowledge flow.…”