Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries
AbstractDo processes of firm entry and exit improve the competitiveness of regions? If so, is this a universal mechanism or is it contingent on the type of industry or region in which creative destruction takes place? This paper analyses the effect of firm entry and exit on the competitiveness of regions, measured by Total Factor Productivity (TFP) growth. Based on a study across 40 regions in the Netherlands over the period 1988-2002, we find that firm entry is related to productivity growth in services, but not in manufacturing. The positive impact found in services does not necessarily imply that new firms are more efficient than incumbent firms; high degrees of creative destruction may also improve the efficiency of incumbent firms. We also find that the impact of firm dynamics on regional productivity in services is higher in regions exhibiting diverse but related economic activities.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 0813.
Length: 30 pages
Date of creation: Aug 2008
Date of revision: Aug 2008
entrepreneurship; entry & exit; turbulence; creative destruction; regional competitiveness; total factor productivity;
Other versions of this item:
- Niels Bosma & Erik Stam & Veronique Schutjens, 2011. "Creative destruction and regional productivity growth: evidence from the Dutch manufacturing and services industries," Small Business Economics, Springer, vol. 36(4), pages 401-418, May.
- Niels Bosma & Erik Stam & Veronique Schutjens, 2009. "Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries," Jena Economic Research Papers 2009-003, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- O18 - Economic Development, 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-08-31 (All new papers)
- NEP-BEC-2008-08-31 (Business Economics)
- NEP-COM-2008-08-31 (Industrial Competition)
- NEP-EFF-2008-08-31 (Efficiency & Productivity)
- NEP-ENT-2008-08-31 (Entrepreneurship)
- NEP-GEO-2008-08-31 (Economic Geography)
- NEP-MIC-2008-08-31 (Microeconomics)
- NEP-TID-2008-08-31 (Technology & Industrial Dynamics)
- NEP-URE-2008-08-31 (Urban & Real Estate Economics)
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.:
- Marcus Dejardin, 2011. "Linking net entry to regional economic growth," Small Business Economics, Springer, vol. 36(4), pages 443-460, May.
- D.B. Audretsch & L. Klomp & E. Santarelli & A.R. Thurik, 2004.
"Gibrat's Law: Are the Services Different?,"
Review of Industrial Organization,
Springer, vol. 24(3), pages 301-324, 05.
- Roy Thurik & Enrico Santarelli & David Audretsch & Luuk Klomp, 2002. "Gibrat's Law: Are the Services Different?," Scales Research Reports H200201, EIM Business and Policy Research.
- Audretsch, D.B. & Klomp, L. & Thurik, A.R., 2002. "Gibrat's Law: are the services different?," ERIM Report Series Research in Management ERS-2002-04-STR, 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.
- Eric J. Bartelsman & Mark Doms, 2000.
"Understanding productivity: lessons from longitudinal microdata,"
Finance and Economics Discussion Series
2000-19, Board of Governors of the Federal Reserve System (U.S.).
- Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
- Eric J. Bartelsman, 2004. "Firm Dynamics and Innovation in the Netherlands A comment on Baumol," De Economist, Springer, vol. 152(3), pages 353-363, 09.
- 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.
- Michael Fritsch, 2011. "New Business Formation and Regional Development: A Survey and Assessment of the Evidence," Discussion Papers of DIW Berlin 1127, DIW Berlin, German Institute for Economic Research.
- Frank Oort & Niels Bosma, 2013. "Agglomeration economies, inventors and entrepreneurs as engines of European regional economic development," The Annals of Regional Science, Springer, vol. 51(1), pages 213-244, August.
- Marco Vivarelli, 2012. "Entrepreneurship and Post-Entry Performance: the Microeconomic Evidence," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1286, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
- Kent Eliasson & Hans Westlund, 2013. "Attributes influencing self-employment propensity in urban and rural Sweden," The Annals of Regional Science, Springer, vol. 50(2), pages 479-514, April.
- Michael Fritsch, 2012. "Methods of analyzing the relationship between new business formation and regional development," Jena Economic Research Papers 2012-064, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- ITO Keiko & KATO Masatoshi, 2012. "Does New Entry Drive Out Incumbents? Evidence from establishment-level data in Japan," Discussion papers 12034, Research Institute of Economy, Trade and Industry (RIETI).
- Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.
- 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.
- Michael Fritsch & Alexandra Schroeter, 2007. "Why Does the Effect of New Business Formation Differ Across Regions?," Jena Economic Research Papers 2007-077, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economic Research Papers 2011-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Fabrizio Coricelli & Andreas Wörgötter, 2012. "Structural Change and the Current Account: The Case of Germany," OECD Economics Department Working Papers 940, OECD Publishing.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.