Firm Entry and Exit in Local Markets: Market Pull and Unemployment Push
AbstractFirm entry and exit flows in the retailing and consumer services may be viewed as market equilibrating processes. Local markets with considerable market room and high unemployment ought to be characterized by high subsequent entry rates and low exit rates. However, lack of entrepreneurial alertness may inhibit this. We examine the relationship and obtain empirical results for a range of selected industries in 563 Belgian municipalities. We show that, over a three-year period, (net) entry is positively affected by the presence of local 'market room' and also by future market pull. We find 'unemployment push' effect on entry in easy-to-enter industries, but also a significant effect of unemployment on exit.
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Bibliographic InfoPaper provided by University of Namur, Department of Economics in its series Working Papers with number 1114.
Length: 20 pages
Date of creation: Oct 2011
Date of revision:
Entrepreneurship; Entry; Exit; Entrepreneurship; Unemployment;
Find related papers by JEL classification:
- L80 - Industrial Organization - - Industry Studies: Services - - - General
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-01 (All new papers)
- NEP-BEC-2011-11-01 (Business Economics)
- NEP-ENT-2011-11-01 (Entrepreneurship)
- NEP-IND-2011-11-01 (Industrial Organization)
- NEP-SBM-2011-11-01 (Small Business Management)
- NEP-URE-2011-11-01 (Urban & Real Estate Economics)
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