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Firm Entry and Exit in Local Markets: Market Pull and Unemployment Push

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Author Info

  • Marcus Dejardin

    ()
    (CERPE, University of Namur-FUNDP)

  • Martin Carree

    ()
    (Maastricht University)

Abstract

Firm 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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File URL: http://www.fundp.ac.be/eco/economie/recherche/wpseries/wp/1114.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by University of Namur, Department of Economics in its series Working Papers with number 1114.

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Length: 20 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:nam:wpaper:1114

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Keywords: Entrepreneurship; Entry; Exit; Entrepreneurship; Unemployment;

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References

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  1. Marcus Dejardin, 2006. "L'entrepreneuriat, le territoire et les conditions de leurs dynamiques cumulatives," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(2), pages 185-201.
  2. Adriaan Van Stel & David Storey, 2004. "The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(8), pages 893-909.
  3. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  4. Schultz, Theodore W, 1980. " Investment in Entrepreneurial Ability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 82(4), pages 437-48.
  5. Daniel Serra & Charles Revelle & Ken Rosing, 1999. "Surviving in a competitive spatial market: The threshold capture model," Economics Working Papers 359, Department of Economics and Business, Universitat Pompeu Fabra.
  6. Hattwick, Richard E., 1979. "Perception, opportunity and profit : Studies in the Theory of Entrepreneurship. By Israel M. Kirzner. Chicago: The University of Chicago Press, 1980. Pp. 239. Price: $15.00," Journal of Behavioral Economics, Elsevier, Elsevier, vol. 8(2), pages 183-188.
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Cited by:
  1. Katharina Pijnenburg, 2013. "Self-Employment and Economic Performance: A Geographically Weighted Regression Approach for European Regions," Discussion Papers of DIW Berlin 1272, DIW Berlin, German Institute for Economic Research.

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