Creative Destruction and Regional Competitiveness
AbstractNew firms stimulate competitiveness via market selection and competitive pressures, by forcing less efficient incumbents to exit or to improve their productivity. This way, both the creation and destruction of firms (turbulence) may improve competitiveness. In this paper the effect of turbulence on regional competitiveness (measured as total factor productivity and employment growth) is analysed in 40 regions in the Netherlands over the period 1988-2002. Our analyses suggest that turbulence leads to productivity growth in services but not so in manufacturing. Employment growth appears to benefit from firm dynamics in manufacturing.
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Bibliographic InfoPaper provided by EIM Business and Policy Research in its series Scales Research Reports with number H200624.
Length: 29 pages
Date of creation: 13 Dec 2006
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