The Local Culture - Entrepreneurship Relation in the Equation of Agglomeration Economies
The Local Culture - Entrepreneurship Relation in the Equation of Agglomeration Economies

Summary/Abstract: Agglomeration economies are defined as the external benefits that economic actors can obtain by being located near other firms, workers and consumers. This paper aims to show that there is a causal relationship between the features of local culture and entrepreneurship, resulting in a positive effect, which leads to agglomeration economies. The cultural matrix is acknowledged as a foundation of agglomeration economies. It is found to some extent in the content of other micro-foundations of these specific economies of scale, enhancing their effects: the interactions established within the labour market are circumscribed to social relations; knowledge spillovers depend largely on informal rules and patterns of interaction between individuals; the willingness to start businesses and receptiveness to new ideas (features of entrepreneurship) depend on the cultural background which defines the attitude towards change and risk-taking. The study also aims to capture the influence of cultural factors on the development of agglomeration economies, by taking into consideration the local characteristics of businesses and work force, while answering the question of why such agglomerations are more efficient in Western Romania compared to its North-Eastern part. The research was based on a number of sociological studies on Romanian values conducted in Romania’s historical regions. By comparing the present situations in the two regions in relationship with their economic performance, we came to the conclusion that much of the Western superiority is due to the presence in this area, to a greater extent, of the cultural traits connected with the idea of acquiring wealth.

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