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How Large are the Direct Employment Effects of New Businesses? An Empirical Investigation for West Germany

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Author Info
Michael Fritsch ()
Antje Weyh ()

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Abstract

We analyze the development of employment in start-up cohorts, which is the direct gross employment effect of the new businesses. The data is for West Germany and covers the 1984–2002 period. While total employment in the cohorts remains above the initial level in manufacturing, we find a pronounced decline of employment below this level in the service sector. Only a small fraction of the firms create a considerable amount of jobs. The contribution that the start-up cohorts of the 1984–2002 period made to total employment in 2002 is nearly three times as high in services as in manufacturing. Copyright Springer 2006

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File URL: http://hdl.handle.net/10.1007/s11187-006-0005-z
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Publisher Info
Article provided by Springer in its journal Small Business Economics.

Volume (Year): 27 (2006)
Issue (Month): 2 (October)
Pages: 245-260
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:sbusec:v:27:y:2006:i:2:p:245-260

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Web page: http://www.springerlink.com/link.asp?id=100338

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Related research
Keywords: employment change; new firms; start-up cohorts; D21; L10; L29; M13;

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References listed on IDEAS
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.:
  1. Grotz, Reinhold & Brixy, Udo, 2002. "Entry-rates, the share of surviving businesses and employment growth: differences between West and East Germany since unification," ERSA conference papers ersa02p175, European Regional Science Association. [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Michael Fritsch & Pamela Mueller, 2008. "The effect of new business formation on regional development over time: the case of Germany," Small Business Economics, Springer, vol. 30(1), pages 15-29, January. [Downloadable!] (restricted)
  2. Rui Baptista & Vítor Escária & Paulo Madruga, 2008. "Entrepreneurship, regional development and job creation: the case of Portugal," Small Business Economics, Springer, vol. 30(1), pages 49-58, January. [Downloadable!] (restricted)
  3. Oliver Falck, 2005. "Survival Chances of Start-Ups - do Regional Conditions Matter?," ERSA conference papers ersa05p49, European Regional Science Association. [Downloadable!]
  4. Michael Fritsch & Pamela Mueller, 2004. "Regional Growth Regimes Revisited - The Case of West Germany," Papers on Entrepreneurship, Growth and Public Policy 2004-04, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  5. Brixy, Udo & Kohaut, Susanne & Schnabel, Claus, 2005. "How fast do newly founded firms mature? : empirical analyses on job quality in start-ups," IAB Discussion Paper 200502, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
    Other versions:
  6. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, vol. 30(1), pages 1-14, January. [Downloadable!] (restricted)
  7. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  8. 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. [Downloadable!]
    Other versions:
  9. Bauer, Thomas K. & Schmucker, Alexandra & Vorell, Mathias, 2008. "KMU und Arbeitsplatzdynamik : eine Analyse auf Basis der Beschäftigten-Historik-Datei," IAB Discussion Paper 200802, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  10. Joachim Wagner, 2006. "Politikrelevante Folgerungen aus Analysen mit wirtschaftsstatistischen Einzeldaten der Amtlichen Statistik," Working Paper Series in Economics 16, University of Lüneburg, Institute of Economics. [Downloadable!]
  11. Marco Caliendo & Alexander S. Kritikos, 2008. "Start-Ups by the Unemployed: Characteristics, Survival and Direct Employment Effects," Working Papers 008, Hanseatic University, Germany, Department of Economics. [Downloadable!]
    Other versions:
  12. René Böheim & Alfred Stiglbauer & Rudolf Winter-Ebmer, 2008. "On the Persistence of Job Creation in Old and New Firms," Economics working papers 2008-04, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
    Other versions:
  13. Michael Fritsch & Pamela Mueller, 2006. "The Effect of New Business Formation on Regional Development over Time: The Case of Germany," Papers on Entrepreneurship, Growth and Public Policy 2006-19, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
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