Location, Location, Location: Place-Specific Human Capital, Rural Firm Entry and Firm Survival
A growing subset of economic development programs in the United States are aimed at attracting or creating new firms. Firms less than five years old account for the vast majority of net new job creation in the United States. However, new firms are fragile: one-third of new start-ups fail within two years of opening and two-thirds exit by their sixth year. To succeed, economic development strategies must increase the pace of firm entry without altering the likelihood of failure. Designing such policies requires information on what factors contribute to the success or failure of new ventures, and how those factors vary across locations.