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E:\McNair\Projects\Accelerators\EnclosingCircle\Draw_circles_test\draw_vc_circles.py

Clusters of economic activity plays a significant role in the firms performance and growth. An important driver of growth is the knowledge spillover between firms. This includes among others the facilitation of information flow and ideas between firms which could be a milestone especially in the growth of startup firms or small businesses. This project focuses on the effects of agglomeration on the performance and growth of venture capital backed up firms. It introduces a novel measure of agglomeration which can be used to empirically test the effects of clustering. This measure the is smallest total circle area that covers all of the startups in the sample such that there are at least n firms in each circle. The projects is based on the creation of an algorithm which gives an unbiased measure to be used in the empirical analysis. The regression we are interested in takes the following form: