1. POLICY ENVIRONMENT AND ENTREPRENEURIAL TRANSIENCE Sergey Anokhin Jaume Franquesa Jino Mwaka Management & Information Systems Department Kent State University September 28, 2007

2. 9/28/2007Kent State University2 Expansion into the area Entrepreneurial Failure Gainful employment of entrepreneurial talent within the area Entrepreneurial Transience Environmental conditions Local policies StimulatePrevent By the local residents By the individuals residing elsewhere New venture creation within the area Migration into the area Inflow of the existing ventures into the area from elsewhere Entrepreneurial Transience: A novel area of study

3. 9/28/2007Kent State University3 Hypotheses TRANSIENCE Sales Tax Property Tax Income Tax Enterprise Zones Education Personal Income H.1+ H.2+ H.3- H.4- H.5+ H6 (a, b, c)

4. 9/28/2007Kent State University4 Data & Method  Rich multi-source secondary data: including BWC, ODOD, Ohio Department of Taxation, Bureau of Census, Bureau of economic analysis, SBA, and FDIC  Panel data (2001 – 2004), 88 counties, 352 observations Random – Effects generalized Least squares regression Robust estimation of standard errors Wald   statistics  D.V: Rate of Net transience (Transience/Actives)  Net Transience i (t) = [Actives i (t) – Actives i (t-1)] – [New i (t) – Cancelled i (t) – Bankrupt i (t)]  IVs: Educational attainment (% of adult population with Bachelors degree or higher) Enterprise Zones (# of active EZ/# of municipalities) Tax Rates: Sales, income, property – class II  Controls

5. Results

6. 9/28/2007Kent State University6 Interaction plots

7. 9/28/2007Kent State University7 Interaction plots …

8. 9/28/2007Kent State University8 Discussions  Importance of policy variables  The importance of human capital  No direct effect of creation of special economic zones  Moderating effect of average income  Exploratory study

9. 9/28/2007Kent State University9 Questions, Comments, Suggestions?