Temporal and Geographic Stress Testing of Entrepreneurial Proportionalities in United States Counties

Abstract

Urbanization is one of man’s greatest challenges. Its handling requires a better understanding of orderliness in the demographic–socioeconomic–entrepreneurial domain of human settlements. Operating business enterprises are manifestations of successful entrepreneurship, which is the characteristic of interest here. Non-linear entrepreneurial proportionalities can be detected through the use of log–log regressions (power law analyses). Such analyses revealed many entrepreneurial proportionalities in datasets of a large number of U.S. counties. This enabled the examination of the temporal and geographic sensitivities of three entrepreneurial types: total entrepreneurship (expressed in total enterprise numbers), new entrepreneurship (the ability to successfully start enterprises of types not yet present), and existing entrepreneurship (the ability to start more enterprises of types already present). Stress testing of the entrepreneurial proportionalities during a period of economic growth (2000 to 2007) followed by a period of economic decline (the so-called Great Recession from 2007 to 2010) enabled the examination of a hypothesis that suggested that the entrepreneurial proportionalities are not temporally or geographically sensitive. The hypothesis is accepted for new and existing entrepreneurship. Total entrepreneurship is geographically sensitive, but not temporally. There is apparently no lack of entrepreneurship in human settlements. Their total entrepreneurship (expressed as total enterprise numbers) appears to be a function of their population sizes and prosperity/poverty levels.