Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/178211
Authors: 
Konon, Alexander
Fritsch, Michael
Kritikos, Alexander
Year of Publication: 
2018
Series/Report no.: 
DIW Discussion Papers No. 1732
Abstract: 
We analyze whether start-up rates in different industries systematically change with business cycle variables. Using a unique data set at the industry level, we mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the largescale industries, including the innovative part of manufacturing, are only influenced by changes in the cyclical component of unemployment, while entries into small-scale industries, like knowledge intensive services, are mostly influenced by changes in the cyclical component of GDP. Thus, our analysis suggests that favorable conditions in terms of high GDP might not be germane for start-ups. Given that both innovative and non-innovative businesses react counter-cyclically in 'regular' recessions, business formation may have a stabilizing effect on the economy.
Subjects: 
new business formation
entrepreneurship
business cycle
manufacturing
services
innovative industries
JEL: 
E32
L16
L26
R11
Document Type: 
Working Paper

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