Entrepreneurship and cities: examining the link between startup rates and economic growth across the United States Rosen, Jamie B. author Mehrotra, Neil advisor Sandstede, Bjorn reader Brown University Department of Economics sponsor text theses 2017 56 p. reformatted digital eng Senior thesis (AB)--Brown University, 2017 Applied Mathematics Economics This paper measures both the correlation and causal relationship between startups and urban economic growth in the U.S. over the past thirty years. Correlation results using MSA and time fixed effects find that a one percentage point increase in the startup rate is associated with a 0.102 to 0.137 percentage point increase in population growth rates, a 0.648 to 0.826 percentage point increase in employment growth rates, and a 0.037 to 0.135 percentage point decrease in unemployment rates. Using industry concentration and natural resources and mining employment share as instruments for entrepreneurship, there also appears to be a causal effect of startups on increased personal income per capita, population, and employment growth rates and decreased unemployment rates. Finally, case studies using changes in state corporate tax rates, angel investor tax credits, and digital firm formation laws to exploit statewide variation in entrepreneurship do not show startup rate differences between states that received the policy change and "control" states. This result suggests that traditional policy levers designed to increase entrepreneurship have not resulted in measurable startup growth and calls into question the best actions cities can take to foster entrepreneurship. Entrepreneurship Economic development New business enterprises Cities 10.7301/Z0KH0KRDIn CopyrightCollection is open for research.