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Job Creation and Job Destruction by Small Firms: An Empirical Investigation for the Dutch Manufacturing Sector

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Author Info
 Broersma, Lourens
Gautier, Pieter

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Abstract

This paper studies the differences in behaviour of small and large firms, concerning job creation and job destruction, in the Dutch manufacturing sector over the period 1978-1991. We find that both job creation and job destruction rates are higher in small firms than in large ones. In addition, we found that the persistence of jobs created in slumps are much higher for small firms than for large firms. Persistence rates of job destruction are, however, less connected to the state of the business cycle and increase with firm size. More importantly, small firms seem to reallocate their jobs in a continuous way, as job turnover moves independent of the business cycle. Large firms, on the other hand, reallocate counter-cyclically. An obvious explanation for this phenomenon is that small firms are better equipped to adjust to shifts in economic circumstances. Large firms adjust only slowly and for them reallocating jobs in a recession is more advantageous than in a boom. Copyright 1997 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Small Business Economics.

Volume (Year): 9 (1997)
Issue (Month): 3 (June)
Pages: 211-24
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Handle: RePEc:kap:sbusec:v:9:y:1997:i:3:p:211-24

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  3. Gielen, Anne C. & Ours, Jan C. van, 2005. "Age-specific cyclical effects in job reallocation and labor mobility," Discussion Paper 86, Tilburg University, Center for Economic Research. [Downloadable!]
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  4. Ramón Gómez-Salvador & Julián Messina & Giovanna Vallanti, 2004. "Gross job flows and institutions in Europe," Working Paper Series 318, European Central Bank. [Downloadable!]
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  5. Audretsch, David B & Sanders, Mark, 2007. "Globalization and the Rise of the Entrepreneurial Economy," CEPR Discussion Papers 6247, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. David B. Audretsch & Mark Sanders, 2008. "Globalization and the Rise of the Entrepreneurial Economy," Working Papers 08-21, Utrecht School of Economics. [Downloadable!]
  7. David Neumark & Junfu Zhang & Brandon Wall, 2005. "Employment Dynamics and Business Relocation: New Evidence from the National Establishment Time Series," NBER Working Papers 11647, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. André Stel & Kashifa Suddle, 2008. "The impact of new firm formation on regional development in the Netherlands," Small Business Economics, Springer, vol. 30(1), pages 31-47, January. [Downloadable!] (restricted)
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  9. Stephen Roper, 2004. "Job Creation and Destruction in Northern Ireland - 1973-1993," The Economic and Social Review, Economic and Social Studies, vol. 35(2), pages 183–218. [Downloadable!]
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