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The direct and indirect effects of new businesses on regional employment: an empirical analysis

Author

Listed:
  • Michael Fritsch
  • Florian Noseleit
  • Yvonne Schindele

Abstract

We analyse the different types of effects that new businesses may have on regional employment. One of these effects is the direct contribution of employment in the new businesses to overall employment. We also estimate the indirect effect of new business formation on incumbent employment. We find pronounced differences between regions with regard to the two effects. Effects of new business formation on incumbent employment are considerably larger than the direct contribution of new businesses to employment.

Suggested Citation

  • Michael Fritsch & Florian Noseleit & Yvonne Schindele, 2010. "The direct and indirect effects of new businesses on regional employment: an empirical analysis," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 10(1), pages 49-64.
    • Handle: RePEc:ids:ijesbu:v:10:y:2010:i:1:p:49-64
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    Citations

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    Cited by:

    1. Sierdjan Koster & André Stel & Mickey Folkeringa, 2012. "Start-ups as drivers of market mobility: an analysis at the region–sector level for The Netherlands," Small Business Economics, Springer, vol. 39(3), pages 575-585, October.
    2. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.
    3. Slavtchev, Viktor & Wyrwich, Michael, 2023. "The effects of TV content on entrepreneurship: Evidence from German unification," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 696-721.
    4. Michael Fritsch & Florian Noseleit, 2013. "Indirect employment effects of new business formation across regions: The role of local market conditions," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 361-382, June.
    5. Michael Fritsch & Florian Noseleit, 2013. "Start-ups, long- and short-term survivors, and their contribution to employment growth," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 719-733, September.
    6. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.

    More about this item

    Keywords

    entrepreneurship; new business formation; regional development; direct effects; indirect effects; regional employment; new businesses.;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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