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Entrepreneurship, Regional Development and Job Creation: the Case of Portugal

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Author Info
Rui Baptista ()
Paulo Madruga
Vitor Escaria
Abstract

This paper investigates whether a high level of new business formation in a region stimulates employment in that region. The study looks at the lag structure of these effects, using a data set covering a fairly large time span (1982-2002). The indirect supply-side effects of new firm births, whether due to greater competition, efficiency or innovation, seem to be at least as important as the direct effects associated with employment creation by the new entrants. However, such supply-side effects only occur after a time lag of about eight years, leading to a pattern of lagged effects that is somewhat u-shaped. This finding suggests that new entrants bring about improvements to overall regional competitiveness, but that such improvements only become significant after some time.

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Paper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2005-06.

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Length: 47 pages
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Handle: RePEc:esi:egpdis:2005-06

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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.:
  1. Zoltan Acs & Catherine Armington, 2004. "Employment Growth and Entrepreneurial Activity in Cities," Regional Studies, Taylor and Francis Journals, vol. 38(8), pages 911-927, January. [Downloadable!] (restricted)
    Other versions:
  2. Rui Baptista & Roy Thurik, 2004. "The Relationship between Entrepreneurship and Unemployment: is Portugal an Outlier?," Papers on Entrepreneurship, Growth and Public Policy 2004-40, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  3. Christensen, Clayton M. & Rosenbloom, Richard S., 1995. "Explaining the attacker's advantage: Technological paradigms, organizational dynamics, and the value network," Research Policy, Elsevier, vol. 24(2), pages 233-257, March. [Downloadable!] (restricted)
  4. Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2004. "Entry and Productivity Growth: Evidence from Microlevel Panel Data," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 265-276, 04/05. [Downloadable!] (restricted)
  5. David B. Audretsch & A. Roy Thurik, 2000. "Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 17-34. [Downloadable!] (restricted)
  6. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
  7. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August. [Downloadable!] (restricted)
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  8. Blomstrom, Magnus & Kokko, Ari, 1998. " Multinational Corporations and Spillovers," Journal of Economic Surveys, Blackwell Publishing, vol. 12(3), pages 247-77, July. [Downloadable!] (restricted)
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  9. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-52, December. [Downloadable!] (restricted)
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    • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 459-481, December. [Downloadable!] (restricted)
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  11. Boeri, Tito & Cramer, Ulrich, 1992. "Employment growth, incumbents and entrants : Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 10(4), pages 545-565, December. [Downloadable!] (restricted)
  12. Brian Ashcroft & James Love & Eleanor Malloy, 1991. "New Firm Formation in the British Counties with Special Reference to Scotland," Regional Studies, Taylor and Francis Journals, vol. 25(5), pages 395-409, October. [Downloadable!] (restricted)
  13. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  14. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March. [Downloadable!] (restricted)
  15. Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor and Francis Journals, vol. 38(8), pages 961-975, January. [Downloadable!] (restricted)
  16. Peter Johnson & Simon Parker, 1996. "Spatial Variations in the Determinants and Effects of Firm Births and Deaths," Regional Studies, Taylor and Francis Journals, vol. 30(7), pages 679-688, November. [Downloadable!] (restricted)
  17. David B. Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor and Francis Journals, vol. 36(2), pages 113-124, April. [Downloadable!] (restricted)
  18. 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. [Downloadable!]
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  19. Audretsch, D.B. & Fritsch, M., 1993. "A Note on the Measurement of Entry Rates," Papers 93-5, Bergakademie Freiberg Technical University - Faculty of Economics and Business Administration.
  20. A. Roy Thurik & Martin A. Carree & Andre van Stel & David B. Audretsch, 2007. "Does Self-Employment reduce Unemployment?," Jena Economic Research Papers in Economics 2007-089, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
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  21. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December. [Downloadable!] (restricted)
  22. David Audretsch & Roy Thurik, 1997. "Sources of Growth," Tinbergen Institute Discussion Papers 97-109/3, Tinbergen Institute. [Downloadable!]
  23. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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Cited by:
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  1. Miltiades N. Georgiou, 2006. "Does Entrepreneurship create enough Jobs in Europe? A Note," Papers on Entrepreneurship, Growth and Public Policy 2006-08, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
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