Resource title

Why does the effect of new business formation differ across regions?

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Resource description

We investigate regional differences of the effect of new business formation on employment growth in West Germany. We find an inverse u -shaped relationship between the level of start-up activity and employment change. The main variables that shape the employment effects of new businesses in a region are population density, the share of medium level skilled workers, the proportion of Research and Development conducted in small businesses (entrepreneurial technological regime), the unemployment rate as well as the degree of specialization of the regional economy. However, indicators for education and innovation activity in the region proved not to be statistically significant. Conducting our analysis for manufacturing and services separately confirmed the pattern of our previous results only for manufacturing but not for services.

Resource author

Michael Fritsch, Alexandra Schröter

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25670

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Adapt according to the presented license agreement and reference the original author.