The impact of flagship enterprises, entrepreneurial dynamics, and business concentration on the local business exit rates: econometric analysis

Abstract

Purpose: the article investigates direct and moderated effects of flagship enterprises, startup rates, and the concentration of the local economy on the local business exit rates. Discussion: the authors suggest that higher representation of flagship enterprises and higher regional startup rates in the locale positively effect local business exit rates. At the same time, high concentration of the local economy negatively affects business exit rates. It is further suggested that the effects of flagship enterprises are especially prominent when local per capita income is high, whereas the effect of startup rates is stronger when income is low. Results: in a panel data set of 86 municipal districts within three Russian regions, the study confirms the positive effects of flagship enterprises and startup rates and the negative effect of business concentration on the local exit rates. The effects of flagship enterprises and startup rates are moderated by the local income levels in line with the authors’ expectations.