The Turnover of Firms and Industry Growth
AbstractIn a dynamic setting, every firm can be regarded as a “business experiment” with the objective to search and explore new business opportunities. It is suggested that the growth of an industry is enhanced by new-firm entry, since a positive correlation between the number of successes, i.e. fast-growing firms, and the number of business experiments is to be expected. Exit is necessary to sort out the firms that the market rejects. Hence, it is rather the entry and exit of firms that jointly should have a positive effect on growth, rather than the number of entries in isolation. This paper tests the hypothesis that a high turnover rate of firms has no, or a negative, effect on industry growth. The analysis is based on an extensive data set covering all Swedish IT firms that existed between 1994 and 1998. The turnover rate of firms is found to have a significantly positive effect on industry growth. Copyright Springer 2005
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Springer in its journal Small Business Economics.
Volume (Year): 24 (2005)
Issue (Month): 5 (06)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100338
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
- Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1998.
"The Dynamics of Industrial Competition,"
Cambridge University Press, number 9780521633574, October.
- Donghyun Oh & Almas Heshmati & Hans L��f, 2012.
"Technical change and total factor productivity growth for Swedish manufacturing and service industries,"
Taylor & Francis Journals, vol. 44(18), pages 2373-2391, June.
- Oh, Donghyun & Heshmati, Almas & Lööf, Hans, 2009. "Technical Change and Total Factor Productivity Growth for Swedish Manufacturing and Service Industries," Working Paper Series in Economics and Institutions of Innovation 193, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Dong-hyun Oh & Almas Heshmati & Hans Loof, 2009. "Technical Change and Total Factor Productivity Growth for Swedish Manufacturing and Service Industries," TEMEP Discussion Papers 200912, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Sep 2009.
- Henrekson, Magnus & Johansson, Dan, 2010.
"Firm Growth, Institutions and Structural Transformation,"
Working Paper Series
820, Research Institute of Industrial Economics.
- Henrekson, Magnus & Johansson, Dan, 2010. "Firm Growth, Institutions and Structural Transformation," Ratio Working Papers 150, The Ratio Institute.
- Henrekson, Magnus & Johansson, Dan, 2008.
"Gazelles as Job Creators – A Survey and Interpretation of the Evidence,"
Working Paper Series
733, Research Institute of Industrial Economics.
- Magnus Henrekson & Dan Johansson, 2010. "Gazelles as job creators: a survey and interpretation of the evidence," Small Business Economics, Springer, vol. 35(2), pages 227-244, September.
- Henrekson, Magnus & Johansson, Dan, 2008. "Gazelles as Job Creators – A Survey and Interpretation of the Evidence," Ratio Working Papers 117, The Ratio Institute.
- Eliasson, Gunnar & Johansson, Dan & Taymaz, Erol, 2005. "Firm Tunrover and the Rate of Macroeconomic Growth - Simulating the Macroeconomic Effects of Schumpeterian Creative Destruction," Ratio Working Papers 66, The Ratio Institute.
- C. Mirjam van Praag & Peter H. Versloot, 2007.
"What is the Value of Entrepreneurship? A Review of Recent Research,"
Tinbergen Institute Discussion Papers
07-066/3, Tinbergen Institute.
- C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
- C. Mirjam van Praag & Peter H. Versloot, 2007. "What is the Value of Entrepreneurship? A Review of Recent Research," Jena Economic Research Papers 2007-061, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- van Praag, Mirjam & Versloot, Peter H., 2007. "What Is the Value of Entrepreneurship? A Review of Recent Research," IZA Discussion Papers 3014, Institute for the Study of Labor (IZA).
- Satu Nurmi, 2004. "Plant Size, Age and Growth in Finnish Manufacturing," Finnish Economic Papers, Finnish Economic Association, vol. 17(1), pages 3-17, Spring.
- Fridh, Ann-Charlotte, 2003. "The Exit of Pharmacia and Regional Growth," Ratio Working Papers 22, The Ratio Institute.
- Dawn DeTienne & Melissa Cardon, 2012. "Impact of founder experience on exit intentions," Small Business Economics, Springer, vol. 38(4), pages 351-374, May.
- Eliasson, Gunnar & Eliasson, Åsa, 2004. "The Theory of the Firm and the Markets for Strategic Acquisitions," Ratio Working Papers 44, The Ratio Institute.
- Dan Johansson, 2010. "The theory of the experimentally organized economy and competence blocs: an introduction," Journal of Evolutionary Economics, Springer, vol. 20(2), pages 185-201, April.
- Bjuggren, Carl Magnus & Daunfeldt, Sven-Olov & Johansson, Dan, 2010. "Ownership and High-Growth Firms," Ratio Working Papers 147, The Ratio Institute, revised 29 Sep 2010.
- Berggren, Niclas, 2003. "The Benefits of Economic Freedom: A Survey," Ratio Working Papers 4, The Ratio Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.