Skilled human capital accretion, skilled wages and the geography of growing early-stage businesses

Abstract

ABSTRACT This article investigates the relationships among skilled human capital, skilled wages, and growing early-stage (GE) business activity at the level of functional regions in Chile, and assesses the role of external and local skilled human capital accretion. Based on theories of occupational-choice and heterogeneous entrepreneurship in economics, we estimate count-data econometric models of the regional number of growing early-stage businesses that account for the endogeneity of skilled wages. Skilled human capital accretion increases regional growing early-stage businesses activity, while skilled wages deter it. Changes in local skilled human capital explain regional differences in growing early-stage businesses activity, whereas the effect of changes in external skilled human capital is less clear.