Entrepreneurship and Urban Growth: A Fresh Look Using Proximity to Mines

More than half a century ago, a classic article by the economist Benjamin Chinitz in the American Economic Review, "Contrasts in Agglomeration: New York and Pittsburgh," sought to answer a vexing question about the mechanisms of regional economic development. He pointed out a connection between a region’s industrial structure and its ability to generate entrepreneurship, innovation, and new growth.

"For a given size of area," Chinitz wrote, "the entrepreneurial supply curve is also a function of certain traditions and elements of the social structure which are heavily influenced by the character of the area’s historic specializations." And he continued: "The proposition I offer is this: An industry which is competitively organized—in the neoclassical sense of the term 'competition'—has more entrepreneurs per dollar of output than an industry which is organized along oligopolistic lines."