Historical roots of regional entrepreneurship: the role of knowledge and creativity Alfredo Del Monte & Luca Pennacchio Accepted: 10 January 2019 # Springer Science+Business Media, LLC, part of Springer Nature 2019 Abstract This paper analyzes the historical factors that shape current levels and regional differences in new firm formation in innovative industries. Drawing on the knowledge spillover theory of entrepreneur- ship, we propose and test the idea that regional knowledge and creativity affect entrepreneurial activ- ity in the long term. We investigate this in Italy using data at the NUTS-3 geographical level, which goes back as far as 1100 on some items. Our results show that the historical knowledge base, measured as the presence of public universities, is strongly related to the current level of innovative start-ups. There is also a positive relationship between past creativity, mea- sured by the presence of scientists and inventors in the area, and current intensity of new firm formation. Lastly, these long-term effects are complementary, because provinces with both a stronger knowledge base and higher levels of creativity have more current innovative start-ups. These findings suggest that a regional entrepreneurship culture and a social envi- ronment conducive to new firm formation can explain the path-dependency of regional entrepreneurship. Keywords Entrepreneurship . Innovative start-ups . Regional disparities . Knowledge . Knowledge spillovers . Creativity JEL classification L26 . L60 . L80 . O18 . O40 . R11 . R12 . R30 1 Introduction Researchers in the field of industrial policy are increas- ingly aware that fostering the formation of new firms with high growth prospects is the real engine of econom- ic development in advanced economies (Haltiwanger et al. 2013; Mazzucato 2011, 2013). The creation of new firms enhances employment and wealth, raises pro- ductivity, and ultimately promotes economic develop- ment (Acs and Storey 2004). The rate of new firm formation varies strongly by region, with more prosper- ous regions showing higher levels of entrepreneurship (Reynolds et al. 1994). Studies have therefore stressed the importance of strengthening local entrepreneurship to support regional economic development and the cru- cial role of public policies in this endogenous process. Recently, some studies have emphasized the path- dependency of regional entrepreneurship, which is a long-term phenomenon (Fotopoulos 2013; Fritsch and Wyrwich 2014). This means that despite the political, social, and economic changes that influence society over time, the structure of new business formation at local level is broadly constant over a long period and Small Bus Econ https://doi.org/10.1007/s11187-019-00139-8 A. Del Monte Department of Economics and Statistics, University of Naples Federico II, Naples, Italy e-mail: delmonte@unina.it L. Pennacchio (*) Department of Business and Economics, Parthenope University, Via Generale Parisi 13, 80132 Naples, Italy e-mail: luca.pennacchio@uniparthenope.it