IDEAS home Printed from https://ideas.repec.org/a/spr/anresc/v56y2016i1d10.1007_s00168-015-0738-1.html
   My bibliography  Save this article

The effect of new business creation on employment growth in regions facing population decline

Author

Listed:
  • Heike Delfmann

    (University of Groningen)

  • Sierdjan Koster

    (University of Groningen)

Abstract

Particularly in declining regions, new businesses creation is seen as a means to secure (future) employment opportunities. However, the way in which new business creation exerts its influence on employment is not evident. Do start-ups in these areas influencing employment change as they do in growth regions? We disentangle the long- and short-term employment effect of new business creation in municipalities in the Netherlands between 1996 and 2010. We conclude that the regional context matters a great deal for the local employment effect of business creation. Further, it is shown in contexts with modest population decline, new businesses are still an important generator of employment opportunities.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:anresc:v:56:y:2016:i:1:d:10.1007_s00168-015-0738-1
    DOI: 10.1007/s00168-015-0738-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00168-015-0738-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00168-015-0738-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Willis, David B. & Boys, Kathryn A. & Hughes, David W. & Swindall, Devin C., 2012. "Evaluating the Determinants of Self-Employed Income Across Regional Economies: A Case-Study of the U.S. Southeast," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124912, Agricultural and Applied Economics Association.
    2. Thurik, A. Roy & Carree, Martin A. & van Stel, André & Audretsch, David B., 2008. "Does self-employment reduce unemployment?," Journal of Business Venturing, Elsevier, vol. 23(6), pages 673-686, November.
    3. Erik Stam, 2010. "Entrepreneurship, Evolution and Geography," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 6, Edward Elgar Publishing.
    4. David B. Audretsch & A. Roy Thurik, 2000. "Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 17-34.
    5. 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.
    6. Criscuolo, Chiara & Gal, Peter N. & Menon, Carlo, 2014. "The dynamics of employment growth: new evidence from 18 countries," LSE Research Online Documents on Economics 60286, London School of Economics and Political Science, LSE Library.
    7. Martin Andersson & Florian Noseleit, 2011. "Start-ups and employment dynamics within and across sectors," Small Business Economics, Springer, vol. 36(4), pages 461-483, May.
    8. Dr Miguel Sanchez-Martinez & Dr Katerina Lisenkova, 2013. "The Long Term Economic Impacts of Reducing Migration: the Case of the UK Migration Policy," National Institute of Economic and Social Research (NIESR) Discussion Papers 420, National Institute of Economic and Social Research.
    9. Heike Delfmann & Sierdjan Koster & Philip McCann & Jouke Van Dijk, 2014. "Population Change and New Firm Formation in Urban and Rural Regions," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 1034-1050, June.
    10. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    11. Erik Stam, 2010. "Growth beyond Gibrat: firm growth processes and strategies," Small Business Economics, Springer, vol. 35(2), pages 129-135, September.
    12. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
    13. Daniel Baumgartner & Tobias Schulz & Irmi Seidl, 2013. "Quantifying entrepreneurship and its impact on local economic performance: A spatial assessment in rural Switzerland," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 25(3-4), pages 222-250, April.
    14. Head, Keith & Mayer, Thierry, 2006. "Regional wage and employment responses to market potential in the EU," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 573-594, September.
    15. M.A. Carree & A.R. Thurik, 2008. "The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries," Small Business Economics, Springer, vol. 30(1), pages 101-110, January.
    16. Gerke J. Hoogstra & Jouke van Dijk, 2004. "Explaining Firm Employment Growth: Does Location Matter?," Small Business Economics, Springer, vol. 22(3_4), pages 179-192, April.
    17. 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.
    18. Jane Sneddon Little & Robert K. Triest, 2001. "Seismic shifts: the economic impact of demographic change: an overview," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 46.
    19. Kent Eliasson & Hans Westlund, 2013. "Attributes influencing self-employment propensity in urban and rural Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(2), pages 479-514, April.
    20. Carrasco, Raquel, 1999. "Transitions to and from Self-employment in Spain: An Empirical Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 315-341, August.
    21. Scott Shane, 2009. "Why encouraging more people to become entrepreneurs is bad public policy," Small Business Economics, Springer, vol. 33(2), pages 141-149, August.
    22. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
    23. Joris Knoben & Roderik Ponds & Frank van Oort, 2011. "Employment from new firm formation in the Netherlands: Agglomeration economies and the Knowledge Spillover Theory of Entrepreneurship," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 23(3-4), pages 135-157, April.
    24. Michael S. Dahl & Olav Sorenson, 2012. "Home Sweet Home: Entrepreneurs' Location Choices and the Performance of Their Ventures," Management Science, INFORMS, vol. 58(6), pages 1059-1071, June.
    25. Zoltan J. Acs & Attila Varga, 2008. "Entrepreneurship, Agglomeration and Technological Change," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 24, pages 341-352, Edward Elgar Publishing.
    26. Marie-Estelle Binet & François Facchini, 2013. "Determinants of Entrepreneurship in French Regions: The Role of Spatial Heterogeneity," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201312, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    27. Dr Miguel Sanchez-Martinez & Dr Katerina Lisenkova, 2013. "The Long Term Economic Impacts of Reducing Migration: the Case of the UK Migration Policy," National Institute of Economic and Social Research (NIESR) Discussion Papers 420, National Institute of Economic and Social Research.
    28. Werner Bönte & Oliver Falck & Stephan Heblich, 2009. "The Impact of Regional Age Structure on Entrepreneurship," Economic Geography, Taylor & Francis Journals, vol. 85(3), pages 269-287, July.
    29. Sierdjan Koster, 2011. "Individual foundings and organizational foundings: their effect on employment growth in The Netherlands," Small Business Economics, Springer, vol. 36(4), pages 485-501, May.
    30. Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
    31. Charlie Karlsson & Martin Andersson & Therese Norman (ed.), 2015. "Handbook of Research Methods and Applications in Economic Geography," Books, Edward Elgar Publishing, number 14395.
    32. Adriaan Van Stel & David Storey, 2004. "The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 893-909.
    33. Davidsson, Per, 1991. "Continued entrepreneurship: Ability, need, and opportunity as determinants of small firm growth," Journal of Business Venturing, Elsevier, vol. 6(6), pages 405-429, November.
    34. Pamela Mueller & André Stel & David Storey, 2008. "The effects of new firm formation on regional development over time: The case of Great Britain," Small Business Economics, Springer, vol. 30(1), pages 59-71, January.
    35. Tialda Haartsen & Viktor Venhorst, 2010. "Planning For Decline: Anticipating On Population Decline In The Netherlands," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 101(2), pages 218-227, April.
    36. André van Stel & Roy Thurik & Chantal Hartog & Simon Parker, 2010. "The two-way relationship between entrepreneurship and economic performance," Scales Research Reports H200822, EIM Business and Policy Research.
    37. Nicola Meccheri & Gianluigi Pelloni, 2006. "Rural entrepreneurs and institutional assistance: an empirical study from mountainous Italy," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 18(5), pages 371-392, September.
    38. Richard Shearmur & Mario Polese, 2007. "Do Local Factors Explain Local Employment Growth? Evidence from Canada, 1971-2001," Regional Studies, Taylor & Francis Journals, vol. 41(4), pages 453-471.
    39. Michael Fritsch, 2012. "Methods of analyzing the relationship between new business formation and regional development," Jena Economics Research Papers 2012-064, Friedrich-Schiller-University Jena.
    40. Sierdjan Koster & André Stel, 2014. "The relationship between start-ups, market mobility and employment growth: An empirical analysis for Dutch regions," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 203-217, March.
    41. Raquel Carrasco, 1999. "Transitions to and From Self‐employment in Spain: An Empirical Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 315-341, August.
    42. David S. Reher, 2007. "Towards long-term population decline: a discussion of relevant issues," European Journal of Population, Springer;European Association for Population Studies, vol. 23(2), pages 189-207, June.
    43. Martin Andersson & Sierdjan Koster, 2011. "Sources of persistence in regional start-up rates--evidence from Sweden," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 179-201, January.
    44. Coro Chasco Yrigoyen & Jose Vicens Otero, 1998. "Spatial interaction models applied to the design of retail trade areas," ERSA conference papers ersa98p81, European Regional Science Association.
    45. Catherine Armington & Zoltan J. Acs, 2008. "The Determinants of Regional Variation in New Firm Formation," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 18, pages 224-243, Edward Elgar Publishing.
    46. Rui Baptista & Miguel Preto, 2011. "New firm formation and employment growth: regional and business dynamics," Small Business Economics, Springer, vol. 36(4), pages 419-442, May.
    47. Wennekers, Sander & Thurik, Roy, 1999. "Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, vol. 13(1), pages 27-55, August.
    48. Jouke van Dijk & Piet H. Pellenbarg, 2000. "Firm relocation decisions in The Netherlands: An ordered logit approach," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 191-219.
    49. Michael Fritsch (ed.), 2011. "Handbook of Research on Entrepreneurship and Regional Development," Books, Edward Elgar Publishing, number 13399.
    50. Michael Fritsch & Florian Noseleit, 2009. "Start-ups, Long- and Short-Term Survivors and their Effect on Regional Employment Growth," Jena Economics Research Papers 2009-081, Friedrich-Schiller-University Jena.
    51. 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.
    52. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
    53. Huaqun Li & Shaoming Cheng & Kingsley E. Haynes, 2011. "The Employment Effects of New Business Formation: A Regional Perspective," Economic Development Quarterly, , vol. 25(3), pages 282-292, August.
    54. André van Stel & Sierdjan Koster, 2011. "The relationship between start-ups, market mobility and employment growth: An empirical analysis for Dutch regions," Scales Research Reports H201104, EIM Business and Policy Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dalina-Maria ANDREI, 2021. "New Companies’ Formation In Romania. A Pvar Model Approach," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 62(2), pages 30-45, June.
    2. Jusaj, Yvesa & Abazi-Alili, Hyrije, 2022. "Women Entrepreneurship Development in Kosovo: Challenges and Opportunities," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2022), Hybrid Conference, Opatija, Croatia, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Hybrid Conference, Opatija, Croatia, 17-18 June 2022, pages 212-224, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    3. Tijl Hendrich & Jennifer Buurma-Olsen & Judith Bayer, 2022. "Entries and Regional Growth: The Role of Relatedness," CPB Discussion Paper 433, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Thomas Neumann, 2021. "The impact of entrepreneurship on economic, social and environmental welfare and its determinants: a systematic review," Management Review Quarterly, Springer, vol. 71(3), pages 553-584, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Heike Delfmann & Sierdjan Koster, 2014. "New firm formation and its effect on employment growth in declining regions," ERSA conference papers ersa14p1133, European Regional Science Association.
    3. Thomas Neumann, 2021. "The impact of entrepreneurship on economic, social and environmental welfare and its determinants: a systematic review," Management Review Quarterly, Springer, vol. 71(3), pages 553-584, July.
    4. Fritsch, Michael, 2013. "New Business Formation and Regional Development: A Survey and Assessment of the Evidence," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 9(3), pages 249-364, February.
    5. Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economics Research Papers 2011-006, Friedrich-Schiller-University Jena.
    6. repec:elg:eechap:14395_27 is not listed on IDEAS
    7. Michael Fritsch, 2012. "Methods of analyzing the relationship between new business formation and regional development," Jena Economics Research Papers 2012-064, Friedrich-Schiller-University Jena.
    8. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    9. Michael Fritsch & Alexandra Schroeter, 2011. "Does Quality make a Difference? Employment Effects of High- and Low-Quality Start-ups," ERSA conference papers ersa10p1400, European Regional Science Association.
    10. Michael Fritsch & Alexandra Schroeter, 2011. "Why does the effect of new business formation differ across regions?," Small Business Economics, Springer, vol. 36(4), pages 383-400, May.
    11. 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.
    12. Mabel Pisá-Bó & José Fernando López-Muñoz & Josefina Novejarque-Civera, 2021. "The ever-changing socioeconomic conditions for entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 17(3), pages 1335-1355, September.
    13. Sherrill Shaffer & Iftekhar Hasan & Mingming Zhou, 2015. "New Small Firms and Dimensions of Economic Performance," Economic Development Quarterly, , vol. 29(1), pages 65-78, February.
    14. Habib Kachlami & Per Davidsson & Martin Obschonka & Darush Yazdanfar & Anders Lundström, 2021. "The regional employment effects of new social firm entry," Small Business Economics, Springer, vol. 57(3), pages 1221-1241, October.
    15. repec:elg:eechap:14395_15 is not listed on IDEAS
    16. Martin Andersson & Florian Noseleit, 2011. "Start-ups and employment dynamics within and across sectors," Small Business Economics, Springer, vol. 36(4), pages 461-483, May.
    17. Marcus Dejardin, 2011. "Linking net entry to regional economic growth," Small Business Economics, Springer, vol. 36(4), pages 443-460, May.
    18. M.A. Carree & A.R. Thurik, 2008. "The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries," Small Business Economics, Springer, vol. 30(1), pages 101-110, January.
    19. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(6), pages 1453-1495, December.
    20. Mauricio Oyarzo & Gianni Romani & Miguel Atienza & Marcelo Lufin, 2015. "Spatio-temporal persistence of municipal rates of business start-ups in Chile," Documentos de Trabajo en Economia y Ciencia Regional 61, Universidad Catolica del Norte, Chile, Department of Economics, revised Jul 2015.
    21. Fritsch, Michael, 2008. "Die Arbeitsplatzeffekte von Gründungen : ein Überblick über den Stand der Forschung (The employment effects of new businesses : a survey of the current state of research)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(1), pages 55-69.
    22. Gohmann, Stephan F. & Fernandez, Jose M., 2014. "Proprietorship and unemployment in the United States," Journal of Business Venturing, Elsevier, vol. 29(2), pages 289-309.

    More about this item

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • 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
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:56:y:2016:i:1:d:10.1007_s00168-015-0738-1. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.