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New Business Formation and Regional Development: A Survey and Assessment of the Evidence

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  • Fritsch, Michael

Abstract

This monograph reviews the current state of knowledge about the effects of new business formation on regional development. These effects are diverse and include the creation and destruction of employment, introduction of innovations, structural change, and increasing productivity, among others. Theory particularly emphasizes the role that some new businesses play in the diffusion of knowledge and innovation as drivers of economic growth. I provide an explanatory approach that highlights the competitive challenge that start-ups pose to incumbent firms and discuss important implications. The overview of empirical research particularly deals with the development of start-up cohorts, identification of different types of indirect effects and their magnitude, differences based on characteristics of entry, and regional variation. A general conclusion is that the diverse indirect effects of new business formation on development are much more important than the growth effects created by newcomers. The diverse indirect effects of entry on development are currently less than fully understood. Finally, I draw conclusions for policy and put forward a number of important questions for further research.

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File URL: http://dx.doi.org/10.1561/0300000043
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Bibliographic Info

Article provided by now publishers in its journal Foundations and Trends(R) in Entrepreneurship.

Volume (Year): 9 (2013)
Issue (Month): 3 (February)
Pages: 249-364

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Handle: RePEc:now:fntent:0300000043

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Web page: http://www.nowpublishers.com/

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Keywords: Entrepreneurship; New business formation; Employment; Regional development;

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References

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Citations

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Cited by:
  1. Mina Baliamoune-Lutz & Pierre Garello, 2014. "Tax structure and entrepreneurship," Small Business Economics, Springer, vol. 42(1), pages 165-190, January.
  2. Fritsch, Michael & Kritikos, Alexander S. & Pijnenburg, Katharina, 2013. "Business Cycles, Unemployment and Entrepreneurial Entry: Evidence from Germany," IZA Discussion Papers 7852, Institute for the Study of Labor (IZA).
  3. 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.
  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, 06.
  5. Nadine Levratto & Denis Carré & Messaoud Zouikri, 2013. "Dynamique des territoires et création d'entreprises : une analyse des départements français en 2008," Working Papers halshs-00840365, HAL.
  6. Michael Fritsch & Ronney Aamoucke, 2013. "Regional Public Research, Higher Education, and Innovative Start-ups - An Empirical Investigation," Jena Economic Research Papers 2013-026, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  7. Michael Fritsch & Alexander Kritikos & Alina Sorgner, 2013. "Drivers of Self-Employment - A Multivariate Decomposition Analysis for the Case of Germany," Jena Economic Research Papers 2013-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  8. Andrea Bonaccorsi & Cinzia Daraio, 2013. "Knowledge spillover effects at the sub-regional level. Theory and estimation," DIAG Technical Reports 2013-13, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
  9. Michael Fritsch, 2012. "Methods of analyzing the relationship between new business formation and regional development," Jena Economic Research Papers 2012-064, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  10. Nadine Levratto & Denis Carré & Messaoud Zouikri, 2013. "Dynamique des territoires et création d’entreprises : une analyse des départements français en 2008. Local dynamics and firms creation: an analysis of French departments in 2008," EconomiX Working Papers 2013-18, University of Paris West - Nanterre la Défense, EconomiX.
  11. Michael Fritsch & Michael Stützer, 2012. "The Geography of Creative People in Germany revisited," Jena Economic Research Papers 2012-065, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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