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Direct Employment Effects of New Firms

In: Entrepreneurship in the Region

Author

Listed:
  • Dirk Engel
  • Georg Metzger

Abstract

Recent published studies suggest a positive relationship between new business formation and economic development (Audretsch and Fritsch, 2003; Audretsch and Keilbach, 2004; Fritsch and Mueller, 2004). Regions are, however, heterogeneous units and differ with respect to determinants of growth.1 These determinants also affect firm formation and firm growth, and one may, therefore, expect remarkable regional differences in the employment contribution of new firms. For example, Brixy and Grotz (2004) show that the cohort employment of Eastem German start-ups increased more than that of Western German start-ups in mature stages. Related to this discussion, particularly firms occupying market niches and entering into formative stages of new industries are seen as driving forces for positive employment effects in the long run. New or better products, processes, and services increase the technological competitiveness of an economy and, hence, its economic growth. Technology orientation and knowledge intensity are major characteristics of firms occupying market niches forcing its performance and survival (see Almus et al., 1999; Almus, 2001; Agarwal and Audretsch, 2001).

Suggested Citation

  • Dirk Engel & Georg Metzger, 2006. "Direct Employment Effects of New Firms," International Studies in Entrepreneurship, in: Michael Fritsch & Juergen Schmude (ed.), Entrepreneurship in the Region, chapter 5, pages 75-93, Springer.
    • Handle: RePEc:spr:inschp:978-0-387-28376-0_5
    DOI: 10.1007/0-387-28376-5_5
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    Citations

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    Cited by:

    1. 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.
    2. Schnabel, Claus & Kohaut, Susanne & Brixy, Udo, 2008. "Employment Stability of Entrants in Newly Founded Firms: A Matching Approach Using Linked Employer-Employee Data from Germany," IZA Discussion Papers 3353, Institute of Labor Economics (IZA).
    3. 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.
    4. 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.
    5. 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].
    6. Claus Schnabel & Susanne Kohaut & Udo Brixy, 2011. "Employment stability in newly founded firms: a matching approach using linked employer–employee data from Germany," Small Business Economics, Springer, vol. 36(1), pages 85-100, January.
    7. Bauer, Thomas K. & Schmucker, Alexandra & Vorell, Matthias, 2008. "KMU und Arbeitsplatzdynamik: Eine Analyse auf Basis der Beschäftigten-Historik (SMEs and employment dynamics: an analysis based on the Employee History)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 199-221.
    8. 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.
    9. Bauer, Thomas K. & Schmucker, Alexandra & Vorell, Matthias, 2008. "KMU und Arbeitsplatzdynamik: Eine Analyse auf Basis der Beschäftigten-Historik (SMEs and employment dynamics: an analysis based on the Employee History)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 199-221.
    10. 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.
    11. Heger, Diana & Rinawi, Miriam & Veith, Tobias, 2011. "The effect of broadband infrastructure on entrepreneurial activities: The case of Germany," ZEW Discussion Papers 11-081, ZEW - Leibniz Centre for European Economic Research.
    12. Bauer, Thomas K. & Schmucker, Alexandra & Vorell, Matthias, 2008. "KMU und Arbeitsplatzdynamik: Eine Analyse auf Basis der Beschäftigten-Historik (SMEs and employment dynamics: an analysis based on the Employee History)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 199-221.
    13. 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.
    14. Yvonne Schindele & Antje Weyh, 2011. "The direct employment effects of new businesses in Germany revisited: an empirical investigation for 1976–2004," Small Business Economics, Springer, vol. 36(3), pages 353-363, April.

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