Are Entrepreneurial Cities More Successful? Empirical Evidence from 50 German Cities

Abstract

Since the early 1990s, both the German federal government and several of the state governments at Lander level have carried out competitions to identify “the citizen-friendly city”, “the less bureaucratic region” or “the most business-friendly administration”. However, the model of the “entrepreneurial city” has so far only rarely been questioned. Are entrepreneurial cities more successful in economic terms? Do more “business friendliness” and less bureaucracy pay off? And is there a trade-off between entrepreneurialism and social cohesion? This chapter addresses these issues by investigating the reality of 50 German cities. First, different meanings of the “entrepreneurial city” are presented and related to indicators capturing the entrepreneurialism of city administrations. Subsequently, potential economic and social outcomes of entrepreneurialism are discussed. The empirical section of the chapter looks into statistical data from 50 German cities in order to find out whether entrepreneurial cities are more competitive, and to which extent this success is achieved at the expense of social cohesion.