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Title:Creative destruction and regional productivity growth: evidence from the dutch manufacturing and services industries PDF Logo
Authors:Bosma, Niels
Stam, Erik
Schutjens, Veronique
Issue Date:2009
Series/Report no.:Jena economic research papers 2009,003
Abstract:Do firm entry and exit improve the competitiveness of regions? If so, is this a universal mechanism or is it contingent on the type of industry or region in which creative destruction takes place? This paper analyses the effect of firm entry and exit on the competitiveness of regions, measured by total factor productivity (TFP) growth. Based on a study across 40 regions in the Netherlands over the period 1988-2002, we find that firm entry is related to productivity growth in services, but not in manufacturing. The positive impact found in services does not necessarily imply that new firms are more efficient than incumbent firms; high degrees of creative destruction may also improve the efficiency of incumbent firms. We also find that the impact of firm dynamics on regional productivity in services is higher in regions exhibiting diverse but related economic activities.
Subjects:Firm entry
firm exit
turbulence
regional competitiveness
total factor productivity
JEL:L10
M13
O18
R11
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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