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Title:Does quality make a difference? Employment effects of high- and low-quality start-ups PDF Logo
Authors:Fritsch, Michael
Schroeter, Alexandra
Issue Date:2010
Series/Report no.:Jena economic research papers 2011,001
Abstract:This paper investigates the impact of new firms' quality on the magnitude of their employment effects. Our results clearly show that the quality of start-ups, measured by their affiliation with sectors and innovative industries, strongly influences the direct and the overall employment contribution of new firms. In particular, start-ups in manufacturing industries generate larger direct and overall growth effects than those in services. Moreover, new businesses in innovative manufacturing and in knowledge-intensive service industries make a larger direct contribution to employment than start-ups affiliated with other industries. We also find a relatively strong overall effect of new business formation in knowledge-intensive service industries. However, the impact of start-ups in innovative manufacturing industries on overall regional employment growth is not statistically significant, which may be mainly due to their rather small share in all start-ups and because they impact more on firms and employment in other regions than do start-ups in non-innovative manufacturing. Finally, we discuss the implications for entrepreneurship policy that can be derived from our findings.
Subjects:entrepreneurship
new business
formation
innovative industries
regional development
entrepreneurship policy
JEL:L26
M13
O1
O18
R11
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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