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Demography and Innovative Entrepreneurship

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Author Info

  • Werner Bönte

    (Max Planck Institute of Economics, Entrepreneurship, Growth, and Public Policy Group)

  • Oliver Falck

    (Ifo Institute for Economic Research and CESifo)

  • Stephan Heblich

    ()
    (Max Planck Institute of Economics, Entrepreneurship, Growth, and Public Policy Group)

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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Bibliographic Info

Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-084.

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Date of creation: 12 Nov 2007
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Handle: RePEc:jrp:jrpwrp:2007-084

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Keywords: Demography; Age Distribution; Entrepreneurship; Innovation; Region;

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References

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  1. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
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  7. Wooldridge, Jeffrey M., 1999. "Distribution-free estimation of some nonlinear panel data models," Journal of Econometrics, Elsevier, vol. 90(1), pages 77-97, May.
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  17. Audretsch, David B. & Keilbach, Max C. & Lehmann, Erik E., 2006. "Entrepreneurship and Economic Growth," OUP Catalogue, Oxford University Press, number 9780195183511.
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Citations

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Cited by:
  1. 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.
  2. Dietmar Harhoff, 2008. "Innovation, Entrepreneurship und Demographie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(3), pages 46-72, 08.
  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. Jan de Kok & Ingrid Verheul & Abdelfatah Ichou, 2010. "New Firm Performance: Does the Age of Founders Affect Employment Creation?," Scales Research Reports H201015, EIM Business and Policy Research.

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