Family firms and regional entrepreneurship. The european evidence

The aim of this chapter is two-fold. First, it analyzes whether family firm density, together with industry scale, affects entrepreneurship at the regional level. Second, it investigates whether the development stage of the economy plays a role in this relationship. As this last issue is central in our analysis, we explore the different stages of development of European regions to identify the influence of structural industry characteristics on regional entrepreneurship rates across European geographical areas. Our findings indicate that the average firm size and the share of family firms in the regional industry are negatively and positively associated, respectively, with higher regional firm birth rates. This means that entrepreneurship reacts positively to a more pervasive presence of family firms and negatively to the presence of large companies. However, these results only hold in Western European regions, whereas in Eastern Europe entrepreneurial initiatives are positively and significantly driven only by the average firm size and the density of family ownership does not play a substantial role.