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Description:
New firms are important for creating employment opportunities and economic growth. Thus, regions often encourage policies to attract new firms. However, the determinants of new firm formation, such as human capital, personal income, infrastructure, and cultural diversity, are uneven across regions. Regions that have the right mix of factors are more likely attract new firms compared to other areas. This implies that new firm births vary spatially and that there is always an uncertainty associated with new firm formation. Using the Shannon?s entropy-based approach, this paper examines the dynamics of single-unit firm births at the county level in New England from 1999 to 2006.