Regional Clustering in Swedish Entrepreneurship: How do Immigrant and Native Startups Compare?

Abstract

Employing the Getis-Ord local indicator of spatial autocorrelation and a combination of publicly available and restricted-access data on new business formation in Sweden, we document a novel set of results to extend the existing discourse on native and immigrant entrepreneurship. First, we find that the weak global interconnectedness in the data obscures the otherwise strong underlying local dynamics, with Swedish startups forming spatial clusters around the country’s largest economic hubs of Stockholm, Gothenburg, and Malmö. Second, we find that spatial dependence appears slightly stronger among immigrants than among natives. We rationalize our observations using the selection and agglomeration theories of economics and the disadvantage and cultural-capital theories of entrepreneurship research.