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The Direct Employment Effects of New Businesses in Germany Revisited - An Empirical Investigation for 1976 - 2004

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  • Yvonne Schindele

    ()
    (Friedrich Schiller University Jena, School of Economics and Business Administration)

  • Antje Weyh

    ()
    (Institute for Employment Research, IAB regional Saxony)

Abstract

Based on an improved and extended database, the Establishment History Panel, we extend the analysis of Fritsch & Weyh (2006) by investigating the development of employment in German start-up cohorts for the period 1976 to 2004. We conïfirm the typical pattern of an initial increasing and then soon decreasing number of employees in start-up cohorts. Furthermore, we provide some of the first evidence for the "liability of aging" phenomena in Germany. Older firms face a relatively high risk of failure. Although only the largest 25% of the surviving entries grow in terms of employment, after 25 years the number of employees in these relatively large businesses strongly declines.

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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 2008-076.

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Date of creation: 10 Oct 2008
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Handle: RePEc:jrp:jrpwrp:2008-076

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Keywords: Employment change; new firms; start-up cohorts; liability of agibg;

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References

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  1. Fritsch, Michael & Brixy, Udo & Falck, Oliver, 2004. "The effect of industry, region and time on new business survival: A multi-dimensional analysis," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-26-04, University of Passau, Faculty of Business and Economics.
  2. P.A. Geroski & José Mata & Pedro Portugal, 2007. "Founding Conditions and the Survival of New Firms," DRUID Working Papers 07-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Fritsch, Michael, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Freiberg Working Papers 2004,09, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  4. Robert Cressy, 2006. "Why do Most Firms Die Young?," Small Business Economics, Springer, vol. 26(2), pages 103-116, 03.
  5. Fritsch, Michael & Weyh, Antje, 2004. "How large are the direct employment effects of new businesses? An empirical investigation," Freiberg Working Papers 2004,05, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
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Cited by:
  1. Michael Fritsch & Alexandra Schroeter, 2011. "Does Quality make a Difference? Employment Effects of High- and Low-Quality Start-ups," ERSA conference papers ersa10p1400, European Regional Science Association.
  2. Fackler, Daniel & Schnabel, Claus & Wagner, Joachim, 2012. "Establishment Exits in Germany: The Role of Size and Age," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62025, Verein für Socialpolitik / German Economic Association.
  3. Yvonne Schindele & Michael Fritsch & Florian Noseleit, 2011. "Micro-level Evidence on the Survival of German Manufacturing Industries - A Multidimensional Analysis (refereed paper)," ERSA conference papers ersa10p549, European Regional Science Association.
  4. Michael Fritsch & Florian Noseleit & Yvonne Schindele, 2014. "Surviving Against the Tide: Are New Businesses in Innovative Industries Less Affected by General Economic Trends?," Jena Economic Research Papers 2014-017, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  5. Michael Fritsch & Florian Noseleit, 2013. "Indirect employment effects of new business formation across regions: The role of local market conditions," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 361-382, 06.
  6. 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.
  7. 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.
  8. Schneck, Stefan & May-Strobl, Eva, 2014. "The economic contribution of start-up firms in Germany," Working Papers 02/14, Institut für Mittelstandsforschung (IfM) Bonn.
  9. Fackler, Daniel, 2014. "Establishment survival in East and West Germany: A comparative analysis," Discussion Papers 90, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  10. Michael Fritsch & Florian Noseleit, 2013. "Start-ups, long- and short-term survivors, and their contribution to employment growth," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 719-733, September.

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