ABSTRACT
This chapter describes whether urban areas are more entrepreneurial than other parts of countries and to what extent the observed differences between cities are caused by individual characteristics and context effects. It aims to develop theoretical arguments for a varying relevance of different types of entrepreneurship in urban areas compared with the rest of the respective country. The chapter utilises individual-level data of the Global Entrepreneurship Monitor representing 47 urban areas in 23 European countries. It analyses to what extent differences in entrepreneurship levels between urban areas, in comparison with other areas within countries, can be ascribed to different motivations to start a company. The chapter explains individual participation in different types of early-stage entrepreneurial activity by individual characteristics and urban area-level characteristics. It discusses of the urban area effects that relate to the hypotheses. The chapter explores the debate on urbanization economies and localization economies by discussing the role of entrepreneurial activity in urban settings.
