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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. Michael Fritsch, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Journal of Evolutionary Economics, Springer, vol. 14(5), pages 525-542, December.
  2. Fritsch, Michael & Brixy, Udo & Falck, Oliver, 2004. "The effect of industry, region and time on new business survival: A multi-dimensional analysis," Freiberg Working Papers 2004,04, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  3. 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.
  4. Robert Cressy, 2006. "Why do Most Firms Die Young?," Small Business Economics, Springer, vol. 26(2), pages 103-116, 03.
  5. P.A. Geroski & José Mata & Pedro Portugal, 2003. "Founding Conditions and the Survival of New Firms," Working Papers w200301, Banco de Portugal, Economics and Research Department.
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Cited by:
  1. Fackler, Daniel & Schnabel, Claus & Wagner, Joachim, 2012. "Establishment exits in Germany: The role of size and age," Discussion Papers 76, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. Schneck, Stefan & May-Strobl, Eva, 2014. "The economic contribution of start-up firms in Germany," Working Papers 02/14, Institut für Mittelstandsforschung (IfM) Bonn.
  7. Michael Fritsch & Alexandra Schroeter, 2011. "Does Quality Make a Difference? Employment Effects of High- and Low-Quality Start-Ups," Jena Economic Research Papers 2011-001, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  8. 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.
  9. 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.
  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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