Home Sweet Home: Entrepreneurs’ Location Choices and the Performance of Their Ventures

2012, Management Science, 58(6), pp. 1059-1071

Michael S. Dahl and Olav Sorenson

Entrepreneurs, even more than employees, the off, then Two Locate in regions in which they have deep roots ('home' region). Here, we Examine the performance implications of these choices. Whereas one might expect entrepreneurs two performing better in this region because of the Richer endowments of regionally-embedded social capital, They Might också performing worse if sina location choices rather reflect a preference for spending time with family and friends. We Examine this question Using comprehensive data on Danish startups. Ventures performing better - survive longer and generate greater annual profits and cash flows - when located in regions Där its founders having lived longer. This effect seams of of of of substantial, similar in size to the value of prior experience in the industry (ie two being a spinoff).

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