On the spatial stickiness of UK new firm formation rates

This research explores persistence of new firm formation at the UK NUTS II level for the 1994–2007 period. The results obtained herewith suggest that interregional differences in new firm formation and their determinants are time persistent. The evidence produced shows that past new firm formation rates determine future ones and that, depending on the econometric specification, human capital, local industry structure, sources of external economies and local economic conditions and wealth are significant determinants. The analysis of new firm formation distribution dynamics suggests that whatever changes may arise in the external shape of distribution are not significant and intra-distribution mobility is limited.