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New Firm Creation and Failure: A Matching Approach

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  • Thomas Gries

    ()
    (University of Paderborn)

  • Stefan Jungblut

    ()
    (University of Paderborn)

  • Wim Naude

    ()
    (United Nations University)

Abstract

We propose that the rate of creation and failure of new firm start-ups can be modelled as a search and matching process, as in labor market matching models. Deriving an "entrepreneurial" Beveridge curve, we show that a successful start-up depends on the efficiency with which entrepreneurial ability is matched with business opportunity, and outline a number of possible applications of this matching approach to assist in formalizing the economics of entrepreneurship.

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File URL: http://groups.uni-paderborn.de/fiwi/RePEc/pdf/wpaper/WP39.pdf
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Bibliographic Info

Paper provided by University of Paderborn, CIE Center for International Economics in its series Working Papers with number 39.

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Length: 17 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:pdn:wpaper:39

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Web page: http://www.uni-paderborn.de/fakultaeten/wiwi/department4/cie/
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Keywords: Entrepreneurship; start-ups; labor market matching;

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  1. Gries,Thomas & Naudé, Wim, 2010. "Entrepreneurship and Human Development: A Capability Approach," Working Paper Series wp2010-68, World Institute for Development Economic Research (UNU-WIDER).
  2. Guido Buenstorf, 2007. "Creation and Pursuit of Entrepreneurial Opportunities: An Evolutionary Economics Perspective," Small Business Economics, Springer, vol. 28(4), pages 323-337, April.
  3. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, January.
  4. Blanchflower, D.G. & Oswald, A., 1991. "What Makes an Entrepreneur?," Economics Series Working Papers 99125, University of Oxford, Department of Economics.
  5. Acemoglu, Daron & Shimer, Robert, 2000. "Wage and Technology Dispersion," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 585-607, October.
  6. Thomas Gries & Wim Naudé, 2010. "Entrepreneurship and structural economic transformation," Small Business Economics, Springer, vol. 34(1), pages 13-29, January.
  7. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
  8. Mark Casson & Nigel Wadeson, 2007. "The Discovery of Opportunities: Extending the Economic Theory of the Entrepreneur," Small Business Economics, Springer, vol. 28(4), pages 285-300, April.
  9. James Fiet & Pankaj Patel, 2008. "Entrepreneurial Discovery as Constrained, Sytematic Search," Small Business Economics, Springer, vol. 30(3), pages 215-229, March.
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