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Demography and Innovative Entrepreneurship

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  • Werner Bönte
  • Oliver Falck
  • Stephan Heblich

Abstract

Demographic change will be one of the major challenges for economic policy in the developed world in the next decades. In this article, we analyze the relationship between age structure and the number of startups. We argue that an individual’s decision to start a business is determined by his or her age and, therefore, that a change in a region’s age distribution affects the expected number of startups in the region. Using German regional data, we estimate a count-data model and find that the expected number of startups is positively influenced by the fraction of individuals of working age—20–64 years old. A more detailed analysis of the working-age distribution suggests that startups in knowledge-based (high-tech) manufacturing industries are affected by changes in this distribution whereas firms in other industries are not. In particular, increases in the fraction of individuals in the 20–30 age range and individuals in the 40–50 age range have a positive effect on the number of high-tech startups.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2007/wp-cesifo-2007-10/cesifo1_wp2115.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2115.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_2115

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Keywords: demography; age distribution; entrepreneurship; innovation; region;

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References

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  1. Blundell, Richard & Griffith, Rachel & Van Reenen, John, 1995. "Dynamic Count Data Models of Technological Innovation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 105(429), pages 333-44, March.
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  6. Zoltan J. Acs & Catherine Armington, 2004. "The Impact of Geographic Differences in Human Capital on Service Firm Formation Rates," Papers on Entrepreneurship, Growth and Public Policy, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group 2004-15, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  7. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
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  15. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, Econometric Society, vol. 52(4), pages 909-38, July.
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Citations

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Cited by:
  1. Dietmar Harhoff, 2008. "Innovation, Entrepreneurship und Demographie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 9(3), pages 46-72, 08.
  2. Jan de Kok & Ingrid Verheul & Abdelfatah Ichou, 2010. "New Firm Performance: Does the Age of Founders Affect Employment Creation?," Scales Research Reports, EIM Business and Policy Research H201015, EIM Business and Policy Research.
  3. Werner, Arndt & Faulenbach, Nicole, 2008. "Das Gründungsverhalten Älterer: Eine empirische Analyse mit den Daten des Gründerpanels des IfM Bonn," IfM-Materialien 184, Institut für Mittelstandsforschung (IfM) Bonn.
  4. Katharina Frosch, 2009. "Do only new brooms sweep clean? A review on workforce age and innovation," MPIDR Working Papers WP-2009-005, Max Planck Institute for Demographic Research, Rostock, Germany.

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