Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/24921 
Year of Publication: 
2006
Series/Report no.: 
Papers on Entrepreneurship, Growth and Public Policy No. 2306
Publisher: 
Max Planck Institute of Economics, Jena
Abstract: 
This paper examines the relationship between business dynamics and employment effects in 320 U.S. Metropolitan Statistical Areas (MSA). Much of the theoretical work on industry dynamics focuses on the role of noisy selection and incomplete information on entry and survival. We extend this research by looking at the impact of firm heterogeneity on employment persistence. We find that only start-ups with greater than twenty employees have persistent employment effects over time and only in large diversified metropolitan regions. Therefore, both the type of entry and the characteristics of the region are important for employment growth.
Subjects: 
Industry dynamics
new business formation
employment effects
regions
JEL: 
J6
L6
L8
M13
Document Type: 
Working Paper

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