Proximity to Dissimilar Firms and Universities: Investigating the Impact on Start-up Survival Rates in Sweden and the United States

Abstract

This study explores the impact of proximity to dissimilar firms and universities on start-up survival rates in Sweden and the United States. By investigating the relationship between firm density and start-up survival in two countries with distinct institutional contexts, this research aims to contribute to the existing literature. Using survival analysis and data from CB Insights, SCB, and the U.S. Department of Education, it is found that a higher number of firms within a ZIP code or city significantly decreases the risk of start-up failure or discontinuation in both countries. However, the effect of proximity to universities on start-up survival rates varies depending on the type of graduates present, revealing contrasting outcomes to the Knowledge Spillover Theory of Entrepreneurship. Our findings carry important implications for policymakers, entrepreneurs, and researchers working to foster thriving start-up ecosystems, while also highlighting the need for further research to better understand the underlying factors influencing start-up survival rates in various contexts.