The Art of Entrepreneurship: Artist Clusters and New Firm Formation in NYC

We examine whether artist agglomeration affects new firm formation using ZIPCTA-level data for New York City from 2011 to 2018. To address endogeneity concerns, we instrument contemporary artist concentration using historical neighborhood exposure to artists interacted with an external artist-growth index constructed from five major U.S. cities. The instrument strongly predicts contemporary artist concentration. In the preferred specification, a one-unit increase in the artist location quotient is associated with approximately 62 percent higher annual firm formation. The relationship extends to non-creative-related firms and, in the aggregate, to continued legal registration five years after entry.