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The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?

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Author Info
Adriaan Van Stel
David Storey

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Abstract

Van Stel A. J. and Storey D. J. (2004) The link between firm births and job creation: is there a Upas Tree effect?, Regional Studies 38 , 893-909. This paper examines the relationship between firm births and job creation in Great Britain. It uses a new data set for 60 British regions, covering the whole of Great Britain, between 1980 and 1998. For Great Britain as a whole, no significant relationship between start-ups and employment creation is found in the 1980s, but there is a negative relationship for the 'low enterprise' area of the North East of England. For the 1990s, a significant positive relationship for Great Britain as a whole is found, but for Scotland, which focused policy on start-ups, a negative relationship is found. The authors feel this raises questions over policies designed to raise rates of new firm formation as a strategy for employment creation, particularly in 'low enterprise' areas. Van Stel A. J. et Storey D. J. (2004) Le lien entre la création d'entreprise et la création d'emploi: l'effet Upas, existe-t'il?, Regional Studies 38 , 893-909. Cet article cherche à examiner le lien entre la création d'entreprise et la création d'emploi en Grande-Bretagne. On emploie un nouvel ensemble de données portant sur la période de 1988 à 1998 et pour 60 zones britanniques couvrant toute la Grande-Bretagne. Pour la Grande-Bretagne dans son ensemble, il ne s'avère aucun lien important entre la création d'entreprise et la création d'emploi dans les années 1980, mais un lien négatif pour ce qui est de la zone dite 'à faible entreprise', à savoir le nord-est d'Angleterre. Pour les années 1990, il s'avère un lien positif important pour la Grande-Bretagne dans son ensemble, à la différence de l'Ecosse où la politique a porté sur la création d'entreprise et qui fait preuve d'un lien négatif. Par la suite, des questions se posent sur les politiques qui cherchent à augmenter le taux de création d'entreprise dans le but de créer des emplois, surtout dans les zones dites à 'faible entreprise'. Van Stel A. J. und Storey D. J. (2004) Die Verknüpfung von Firmengründung und Arbeitsbeschaffung: Gibt es einen Upasbaumeffekt?, Regional Studies 38 , 893-909. Dieser Aufsatz untersucht die Beziehung zwischen Firmengründung und Arbeitsbeschaffung in Großbritannien. Dazu werden neue Datenreihen für 60 britische Regionen benutzt, die ganz Großbritannien im Zeitraum 1980-98 erfassen. Für Großbritannien als Ganzes ergab sich während der achtziger Jahre keine signifikante Beziehung zwischen Firmengründung und Arbeitsbeschaffung, doch eine negative in den 'unternehmensschwachen' Gebieten Nordostenglands. Für die neunziger Jahre wird für Großbritannien insgesamt ein signifkant positives Verhältnis festgestellt, aber ein negatives in Schottland, das seine Bestrebungen auf Firmengründungen konzentrierte. Dies wirft Fragen betreff Bestrebungen auf, die speziell auf Anhebung von Firmengründungen als Strategie zur Beschaffung von Arbeitsplätzen abzielten, besonders in 'unternehmensschwachen' Gebieten. Van Stel A. J. y Storey D. J. (2004) El vínculo entre los nacimientos de empresas y la creación de empleo: existe un efecto Upas Tree ?, Regional Studies 38 , 893-909. Este artículo examina la relación entre los nacimientos de empresas y la creación de empleo en Gran Bretaña. Utilizamos una nueva base de datos para 60 regiones británicas, cubriendo Gran Bretaña en su totalidad, entre 1980 y 1998. Para Gran Bretaña en su totalidad no encontramos ninguna relación significativa entre las nuevas empresas y la creación de empleo en los años 80, pero sí encontramos una relación negativa para la zona de 'baja actividad emprendedora' del Noreste de Inglaterra. Para los años 90 encontramos una relación positiva significativa para Gran Bretaña en su totalidad, sin embargo, para Escocia, que concentró sus políticas en la creación de empresas, encontramos una relación negativa. Creemos que esto plantea cuestiones sobre políticas diseñadas a aumentar los índices de formación de nuevas empresas como estrategia de creación de empleo, particularmente en zonas de 'baja actividad emprendedora'.

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Article provided by Taylor and Francis Journals in its journal Regional Studies.

Volume (Year): 38 (2004)
Issue (Month): 8 (January)
Pages: 893-909
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Handle: RePEc:taf:regstd:v:38:y:2004:i:8:p:893-909

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Keywords: New firm start-ups Employment growth Entrepreneurship Great Britain

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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. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October. [Downloadable!] (restricted)
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  3. P.E. Lloyd & C.M. Mason, 1984. "Spatial variations in new firm formation in the United Kingdom: Comparative evidence from Merseyside, Greater Manchester and South Hampshire," Regional Studies, Taylor and Francis Journals, vol. 18(3), pages 207-220, June. [Downloadable!] (restricted)
  4. Cressy, Robert, 1996. "Are Business Startups Debt-Rationed?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1253-70, September. [Downloadable!] (restricted)
  5. Frank, Murray Z, 1988. "An Intertemporal Model of Industrial Exit," The Quarterly Journal of Economics, MIT Press, vol. 103(2), pages 333-44, May. [Downloadable!] (restricted)
  6. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July. [Downloadable!] (restricted)
  7. Paul Reynolds & David Storey & Paul Westhead, 1994. "Cross-national Comparisons of the Variation in New Firm Formation Rates," Regional Studies, Taylor and Francis Journals, vol. 28(4), pages 443-456, July. [Downloadable!] (restricted)
  8. D.B. Audretsch & M.A. Carree & A.R. Thurik, 2001. "Does Entrepreneurship reduce Unemployment?," Tinbergen Institute Discussion Papers 01-074/3, Tinbergen Institute. [Downloadable!]
  9. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May. [Downloadable!] (restricted)
  10. Brian Ashcroft & James Love & Eleanor Malloy, 1991. "New Firm Formation in the British Counties with Special Reference to Scotland," Regional Studies, Taylor and Francis Journals, vol. 25(5), pages 395-409, October. [Downloadable!] (restricted)
  11. David B. Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor and Francis Journals, vol. 36(2), pages 113-124, April. [Downloadable!] (restricted)
  12. Anne E. Green, Ivan Turok, 2000. "Employability, Adaptability and Flexibility: Changing Labour Market Prospects," Regional Studies, Taylor and Francis Journals, vol. 34(7), pages 599-600, October. [Downloadable!] (restricted)
  13. van Praag, C M & Cramer, J S, 2001. "The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion," Economica, London School of Economics and Political Science, vol. 68(269), pages 45-62, February. [Downloadable!] (restricted)
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  1. Pamela Mueller & André van Stel & David J. Storey, 2006. "The effects of new firm formation on regional development over time: The case of Great Britain," Discussion Papers on Entrepreneurship, Growth and Public Policy 2006-24, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
  2. Michael Fritsch & Pamela Mueller, 2005. "The Persistence of Regional New Business Formation-Activity over Time – Assessing the Potential of Policy Promotion Programs," ERSA conference papers ersa05p706, European Regional Science Association. [Downloadable!]
    Other versions:
  3. Stel, A.J. van & Suddle, K., 2005. "The Impact of New Firm Formation on Regional Development in the Netherlands," Research Paper ERS-2005-075-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
    Other versions:
  4. Andre van Stel, . "COMPENDIA: Harmonizing business ownership data across countries and over time," Discussion Papers on Entrepreneurship, Growth and Public Policy 2005-05, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
  5. Martin Carree & Roy Thurik, 2006. "The Lag Structure of the Impact of Business Ownership on Eco-nomic Performance in OECD Countries," Discussion Papers on Entrepreneurship, Growth and Public Policy 2006-02, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
  6. Andre van Stel & David Storey & Roy Thurik, 2006. "The effect of business regulations on nascent and actual entrepreneurship," Discussion Papers on Entrepreneurship, Growth and Public Policy 2006-04, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
  7. Stel, A.J. van & Storey, D. & Thurik, A.R., 2006. "The Effect of Business Regulations on Nascent and Young Business Entrepreneurship," Research Paper ERS-2006-052-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
    Other versions:
  8. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Discussion Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
  9. David B. Audretsch & Roy Thurik & Andre van Stel & M.A. Carree, 2006. "Does Self-Employment Reduce Unemployment?," Discussion Papers on Entrepreneurship, Growth and Public Policy 2005-07, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
  10. Michael Fritsch & Pamela Mueller, 2006. "The Effect of New Business Formation on Regional Development over Time: The Case of Germany," Discussion Papers on Entrepreneurship, Growth and Public Policy 2006-19, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
    Other versions:
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