Alexandra Tsvetkova

Innovation, Entrepreneurship, and Metropolitan Economic Performance

The literature suggests that technological advance is the major driver of economic growth, yet how new knowledge translates into superior economic performance is not described by the growth theories. Two recently proposed frameworks, the missing link hypothesis and the knowledge spillover theory of entrepreneurship, describe a mechanism of the relationship between knowledge creation and regional economic performance through entrepreneurs. This study empirically tests these frameworks using the data on professional, scientific, and technical services in U.S. metropolitan areas from 2001 to 2005. The results indicate an intervening role of entrepreneurs in the relationship between patenting activity and job-creating behavior of incumbent companies, thus lending partial support to the missing link hypothesis. The knowledge spillover theory of entrepreneurship is not supported, as greater local knowledge generation does not translate into increased firm formation.

Entrepreneurial and Employment Responses to Economic Conditions across the Rural-Urban Continuum

In this article, we explore how local employment growth in the urban-rural continuum is affected by economic trends in industries that comprise local economies and by growth in nearby metropolitan areas. Our county-level analyses reveal heterogeneous responses. Favorable economic changes due to a fast-growing local industry mix have the largest positive impact on self-employment growth in small metropolitan areas and the smallest positive impact in rural counties. Self-employment in rural counties is fostered by growth in nearby small metropolitan statistical areas (MSAs) and is hampered by growth in nearby large MSAs. In micropolitan counties that are close to small and medium growing MSAs, local self-employment tends to grow faster, while growth in nearby large MSAs has no effect. In urban counties, growth in a nearby large MSA is not related to local self-employment growth in the lower tiers of the urban hierarchy.

Book Review: The Energy Economy: Practical Insight to Public Policy and Current Affairs

advocated by many city leaders. While Los Angeles made a series of conscious decisions (involving land use, transportation, etc.) to consolidate its position as the nation’s West Coast port-logistics hub, this chosen direction eventually has led to significant specialization in the low-wage handling and warehousing industries. Unfortunately, no business externalities arose that might have attracted the high-wage earners of the New Economy to the region. On the other hand, the business and civic leaders of the Bay Area made more than a gestural response to the changes emerging in the national economy and, beginning in the 1980s, attempted to create the social and institutional underpinnings for sustained growth in the various knowledge-based industries. Moreover, the municipal budgets for the two regions, which are examined in some detail for the time period 1990 to 2010, reveal another interesting facet about the different directions taken by the competing regional governments. Very clearly the data show that Bay Area residents have been willing to pay higher taxes so that residents can enjoy better public transportation, superior health care, and more urban ambience. When taken along with the very different voting patterns of the two regions, the conclusion is reached that the Bay Area has a more constructivist approach to human action where citizens generally share the same beliefs regarding abstract issues like quality of life and the nature of progress. The book concludes with a short chapter on regional differences in social capital and relational networks. Levels of social capital, or general trust, have been much higher in the Bay Area than in Los Angeles for quite some time: recent surveys suggest that trust is now somewhere between 45% and 70% higher in Greater San Francisco. Compared to other places though, neither region really enjoys high levels of civic participation or interpersonal trust, but these broad social qualities are particularly weak in Los Angeles. Evidence is also given that the Bay Area has forged much stronger cross-industry personal linkages, thereby creating “invisible colleges of actors” that allow information to flow much more freely between private and public players. The chapter closes with the Myrdal-like observation that small differences between the two cities in social and political attitudes were slowly magnified into much larger differences in beliefs and lifestyles over the passage of four decades. Although modest in scope, this is a very enlightening book. In many ways it complements Edward Glaeser’s (2011) recent volume celebrating our great cities, and together, the two books would comprise a good introduction to a seminar on urban development. The four authors show a solid grasp of a wide literature and they support their overarching theme of regional divergence with plenty of data and numerous case studies—there are 2 maps, 18 figures, and 31 tables. The book is sprinkled with valuable insights and many important critics and thinkers respected by my generation—including Benjamin Chinitz, Albert Hirschman, and Theodore Roszak—are cited at appropriate junctures. (But there is no mention of Joan Didion.) My only real concern deals with the lack of clarity shown in how the tradable industries are identified in the two cities: The method used here combines location quotients with a national input-output table and then selectively adjusts the proportions, making it nearly impossible to replicate the results. In any case, this tale of different fortunes for California’s two leading cities certainly probes much deeper than the comparative study of Albuquerque and Seattle recently provided by Moretti (2012).