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New Firm Formation by Industry over Space and Time: A Multi-Level Analysis

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  • Michael Fritsch
  • Oliver Falck

Abstract

Wir untersuchen den Einfluss von Branchenmerkmalen, Standort und Veränderungen im Zeitablauf auf Neugründungen von Betrieben mit einem Mehr- Ebenen-Ansatz. Die Analyse bezieht sich auf Westdeutschland im Zeitraum 1983- 1997. Innovationsaktivitäten und die Ausprägung des technologischen Regimes haben offenbar einen wesentlichen Einfluss auf Gründungsaktivitäten. Es bestehen erhebliche Unterschiede zwischen dem Industrie- und dem Dienstleistungssektor hinsichtlich der Bedeutung der verschiedenen Faktoren für das Gründungsgeschehen. Expandierende Nachfrage stimuliert Gründungsaktivitäten während sich ein hohes Niveau an regionaler Arbeitslosigkeit offenbar ungünstig auswirkt. We apply a multi-level approach to analyze simultaneously the effects of three groups of determinants on new firm formation: industry, location and change over time. The data is for West Germany and covers the 1983-97 period. Our analysis indicates that innovation activities and the technological regime play a significant role in new firm formation processes. There are some differences with regard to the impact of a number of variables on start-ups in manufacturing and the service sector. Changes in demand are conducive to new firm formation while a high level of unemployment in a region obviously creates a relatively uncomfortable environment for setting up new businesses.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.40158.de/dp322.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 322.

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Length: II, 29 p.
Date of creation: 2003
Date of revision:
Handle: RePEc:diw:diwwpp:dp322

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Keywords: New firm formation; industrial economics; regional economics; entrepreneurship;

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References

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  1. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
  2. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320.
  3. Pennings, J.M., 1982. "The Urban quality of life and entrepreneurship," Open Access publications from Tilburg University urn:nbn:nl:ui:12-383002, Tilburg University.
  4. Georgios Fotopoulos & Nigel Spence, 1999. "Spatial Variations in New Manufacturing Plant Openings: Some Empirical Evidence from Greece," Regional Studies, Taylor & Francis Journals, vol. 33(3), pages 219-229.
  5. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  6. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, December.
  7. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
  8. David Audretsch & Michael Fritsch, 1999. "The Industry Component of Regional New Firm Formation Processes," Review of Industrial Organization, Springer, vol. 15(3), pages 239-252, November.
  9. Michael Fritsch, 2000. "Interregional Differences in R&D Activities—An Empirical Investigation," European Planning Studies, Taylor & Francis Journals, vol. 8(4), pages 409-427, August.
  10. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-59, November.
  11. Peter Johnson & Simon Parker, 1996. "Spatial Variations in the Determinants and Effects of Firm Births and Deaths," Regional Studies, Taylor & Francis Journals, vol. 30(7), pages 679-688.
  12. Birley, Sue, 1985. "The role of networks in the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 1(1), pages 107-117.
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