**2. Literature Review, Research Niche, and Theoretical Structure**

Empirical research into the role of regional factors in firm survival has broadly focused on the impact of agglomeration, scale economies, and institutional legitimacy [6,9–11].

Investigations into the impact of local labor on firm survival have concentrated primarily on the availability and quality of human capital. In this regard, most of the research focuses on the role of entrepreneur-centric human capital in determining firm survival. The level of human capital possessed by the entrepreneur is typically measured in terms of entrepreneurs' personal characteristics. Ref. [6] cites the role of specific characteristics, namely, the level of education [12], entrepreneur's experience in similar roles [13–16], psychological factors such as motivation and ambition [17], preparation, and time spent on the operations [16]. Interestingly, another strand of related literature found no evidence between such personal characteristics and business survival [18,19].

Ref. [6] found a positive relationship between regional human capital and new firm survival in the growth period (1993–1995), and a not so strong relationship during the recession period (1990–1992) when studying the labor market areas (LMAs) in the U.S. They found that "high school dropout rates are negatively associated with firm survival rate for both periods, and college-degree-share is positively related to firm survival in the growth period." Ref. [7] investigated the variation in labor productivity across states in the U.S. They found that doubling employment density in a county results in a 6% increase in average labor productivity. Ref. [8] found that in Finland, the likelihood of survival of firms established by highly educated employers is greater in the recessionary period than in the growth period. They conclude that the general labor market conditions determine the likelihood of firms surviving in the market.
