Start-ups and employment dynamics within and across sectors

Abstract

Entrepreneurship, Employment growth, Regional development, Start-ups, J23, L26, M13, O52,

New Business Formation and Regional Development: A Survey and Assessment of the Evidence

“…For entries in years t-6 to t-9, a positive relationship is found, with a maximum between years t-7 and t-8. The magnitude of the effect then decreases and becomes slightly negative in the last year Sweden (Andersson and Noseleit, 2011), the United Kingdom (Mueller, van Stel, and Storey, 2008), and the United States (Acs and Mueller, 2008), as well as for a sample of 23 OECD countries (Carree and Thurik, 2008). Fritsch and Mueller (2004) suggest an interpretation of this wave pattern that builds on the systematization of direct and indirect effects, as discussed in a previous section.…”

New business formation and the productivity of manufacturing incumbents: Effects and mechanisms

“…Aghion et al (2009) 7 That new business formation has cross-sector effects has been demonstrated by Andersson and Noseleit (2011), who investigate the effect of regional start-ups on employment change in incumbents in the same sector as well as in other sectors. Distinguishing between manufacturing and low-and high-end service sectors, they find that new business formation in each of these sectors affects employment in the same sector but also in other sectors.…”

The effect of new business creation on employment growth in regions facing population decline

“…1 shows, the impact of new firms on employment growth is not stable over time, with immediate positive effects being followed by short-term negative effects and again by long-term positive effects. Both positive and negative impacts on employment growth are therefore likely to occur, depending on the time lag of the start-up cohort and a number of studies have confirmed this short-, mediumand long-term pattern (Storey 1994;Fritsch andNoseleit 2009, 2013a, b;Andersson and Noseleit 2011;Koster 2011;Li et al 2011). Fritsch (2008) When new businesses enter a market, they may have both direct and indirect effects on employment development (Fritsch and Mueller 2004).…”

“…Although decline in the Netherlands has not yet taken dramatic proportions as it has elsewhere in Europe (Barca 2009;European Commission 2010), the change is structural and incremental and there is a challenge in keeping the declining regions viable in the future (SER 2011). Particularly for declining regions, new business creation is seen as a means to secure current and future employment opportunities (Andersson and Noseleit 2011;Armington and Acs 2002;Audretsch and Thurik 2000;Stam 2010;Wennekers and Thurik 1999). Yet, the mechanisms underlying regional employment dynamics governed by new business creation, especially in the context of population decline, remain unclear, hindering the formulation of effective regional development policies.…”