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This text establishes a novel behavioural theory of economic development to illustrate that differences in human behaviour across cities and regions, both individually and collectively, are a significant deep-rooted cause of uneven development within and across nations.

AbstractIn the opening decades of the twenty‐first century certain cities around the world emerged as hubs of entrepreneurial innovation. This paper explores this urban economic change phenomenon through in‐depth and comparative qualitative analysis. It focuses on the recent contemporary history of New York, Los Angeles, London, Berlin, Tokyo and Shanghai prior to the global COVID pandemic. Based on an analysis of the drivers, mechanisms and processes of change, it is found that these cities acted as places of possibility for many individuals who previously may have been unlikely to engage in entrepreneurship. The cities were found to have established new development paths through entrepreneurial innovation stemming from co‐creation network dynamics, with key human agents playing pivotal roles. Common elements include the rise of venture capital, the growth of entrepreneurial cultures, and institutional policy changes. Notably, entrepreneurial innovation was found to be closely tied to changes in large corporates. This innovation evolved through the proliferation of new infrastructure such as co‐working spaces and innovation incubators, with each city being utilised as a test‐bed for new ideas. Finally, the emergence of a darker side to entrepreneurial innovation is found in terms of growing urban inequality.

AbstractThis paper draws on behavioural economic geography to identify the factors affecting uneven development. It uses the lens of economic competitiveness and addresses the association between differences in human behavioural traits and competitiveness in the context of localities across the United Kingdom. It focusses on the policy requirement for 'levelling up' by improving the performance of lagging localities. On the basis of the finding that local behavioural factors impact competitiveness, the paper develops a behavioural public policy agenda. It is concluded that a greater appreciation of the human behavioural profile of a place can provide a vital cog in stimulating economic development through a more holistic approach to public policy.

AbstractBoth entrepreneurship and foreign direct investment (FDI) are frequently identified as being sources of local and regional economic growth. However, the relationship between the two is not always clear, with a negative competition effect and a positive demand effect potentially present. China provides an interesting case to study with its large state‐owned sector, combined with a recent history of successfully attracting considerable FDI. This study examines the relationship between self‐employment and different elements of foreign influence (FI) at a provincial level. The results imply that foreign investment reduces the level of self‐employment, whilst the number of foreign enterprises and foreign exports have positive effects. The results therefore show the importance in considering multiple perspectives in terms of FI. It appears that policies that attract individual large investments suppress the development of domestic enterprise as predicted by the competition effect, but where more foreign enterprises are present, and a cluster starts to develop, a demand effect appears to take over. This means that provincial government policy may need to be more nuanced to avoid economies being highly reliant on a limited number of what might be quite footloose larger foreign employers.

Abstract
A potential impact of the COVID-19 pandemic is that the nature, rates and spatial configuration of innovation may change within and across cities. To examine these potential changes, this article draws on findings from data gathered through interviews, surveys and secondary data over two time periods: prior to the pandemic and during the fallout from the pandemic. The article utilises the concept of 'entrepreneurial ecosystems' and the analysis finds significant adaptability and resilience across the ecosystems addressed. It is argued that these ecosystems are not only likely to survive, but also to actually thrive as the requirement for new technological solutions and applications allows them to maintain their innovative capacity and capability. It is further found that more spatially distributed patterns of entrepreneurial innovation are emerging across a wider range of cities and regions, which is leading to changes in the spatial economics of innovation. It is concluded that the pandemic is likely to heighten rather than slow down these trends. Furthermore, these trends are set to continue until any new unforeseen global shock with the capacity to destabilise such patterns occurs.

AbstractForeign direct investment brings both increased competitive pressures and opportunities for domestic Small and Medium Sized Enterprises (SMEs). Competition may force them to seek new international markets, but also provide access to international customers. However, as economies become more knowledge‐based in order to access international markets, SMEs must seek to innovate. This study examines how foreign firm presence and innovation influence the exporting activities of SMEs. It contributes to the existing literature by dividing innovation into product/process innovation and in‐house/open innovation. With open innovation, products are more likely to be novel and productivity boosted to a larger degree. We interact different types of innovation with foreign influence to examine whether there is a moderating influence on the relationship. The individual firm level data and foreign influence data are from the Longitudinal Small Business Survey and Office for National Statistics. Whether firms are active exporters is explored using multilevel logit regressions. Both innovative activities and the foreign influence increase the likelihood of exporting. In‐house product innovation boosts export propensity to a lesser degree in areas with higher levels of foreign influence. The hypothesis that open innovation has more impact on exporting activities when foreign influence is greater is not supported for either type of innovation.

It has long been suggested that investment may be time irreversible, and consideration of the option value of waiting to invest has aroused renewed interest in this issue. This paper tests for time irreversibility in UK investment according to disaggregation by type of investment expenditure and across manufacturing sector groupings. The test results reported indicate that the irreversibility of investment patterns varies not only from industry to industry but also according to the type of capital being purchased, with significant time irreversibility detected in gross fixed capital formation and aggregate vehicles expenditure, and industrial sector groupings comprising fuels & oil refining, engineering & vehicles, and textiles & leather. However, only in the first and last of these series is time irreversibility attributable to non-linearities in the underlying data generating process, and consistent with threshold effects which may be associated with (S,s) type models of investment dynamics.

AbstractSpatial approaches to examining entrepreneurship have increasingly built on theories of social capital. However, the nature and extent of local social capital in less successful deprived communities remains under researched and inadequately understood. This article examines the association between social capital and entrepreneurship in a deprived urban neighbourhood in the city of Leeds, UK as a means of contributing to an improved theoretical understanding of how space moderates this association. It is found that social capital has a strong association with patterns of entrepreneurship in deprived urban neighbourhoods, with the potential impacts being both positive and negative. The forms of social capital are found to differ from that found in more affluent localities, with a prevalence of bonding social capital as the key facilitator of entrepreneurship, which may help in the early stages of venture development, but which over time may become a constraint. Also, a lack of the bridging social capital associated with entrepreneurial success is found within the locality. From a policy perspective, it is recommended that policymakers responsible for entrepreneurship in deprived urban neighbourhoods should seek to enhance initiatives for developing social capital which incorporate local businesses, residents and local government agencies.

AbstractThe aim of this paper is to examine the relationship between social capital and entrepreneurship in deprived urban neighbourhoods (DUNs). While there is a great deal of research on social capital, its usage and value in deprived areas is an under‐researched topic. Drawing on survey data, it is found that social capital in the form of network ties within a DUN is linked to how entrepreneurship develops in these places. The breadth and variety of network ties that individuals are able to identify as sources of advice is related to the probability of considering an entrepreneurial career, and is even more strongly related to the conversion of entrepreneurial intentions into full engagement. If entrepreneurship is to be harnessed in DUNs a starting point is the enhancement of initiatives for developing social capital incorporating local businesses, residents, and local government agencies.

In many developed countries there has been a shift from grants to contracts as a source of local public sector funding of the third sector. Smaller third sector organizations may struggle to compete for this funding due to the complex process of accessing and maintaining this funding and conveying their capabilities to funding providers. This study utilizes data from the United Kingdom to determine what factors increase these administrative and communication barriers for smaller organizations. Resources in income and volunteers affect perceptions of the process of obtaining funding. A solution may be standardization of evaluation and monitoring, but this may lead to isomorphism and loss of variety of provision. Better two‐way communication may allow local authorities to retain variety in public service provision through improved knowledge of their partners.