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Title:Why does the effect of new business formation differ across regions? PDF Logo
Authors:Fritsch, Michael
Schröter, Alexandra
Issue Date:2007
Series/Report no.:Jena economic research papers 2007,077
Abstract: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.
Subjects:Entrepreneurship
new business formation
regional development
entrepreneurship policy
JEL:M13
O1
O18
R11
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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