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Determinants of job creation in eleven new EU member states : evidence from firm level data

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  • Oberhofer, Harald
  • Vincelette, Gallina A

Abstract

This paper builds on the analysis of job creation developed in World Bank (2013) to provide an empirical investigation of the industry and firm-specific determinants of the job creation process in eleven new European Union (EU11) economies. It relies on the Amadeus dataset of firms during 2002-2009. The main results indicate that during the years prior to the global financial crisis, traditional industries were crucial for the net creation of jobs in EU11. However, traditional industries were the ones most severely affected by the financial crisis. By contrast, services firms were less vulnerable to the economic downturn. At the firm level, small and young firms registered the highest employment growth rates. The empirical results also indicate that more productive firms tended to be less vulnerable to economic downturns. Moreover, the results demonstrate that the perceived quality of the business climate by the EU11 enterprises is correlated with not only the firms'employment growth, but also their productivity. In the post-crisis period, poor business restrictions were negatively associated with the creation of jobs. All these findings hold for the group of high-growth firms that disproportionately accounted for the creation of new jobs in the EU11 economies.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6533.

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Date of creation: 01 Jul 2013
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Handle: RePEc:wbk:wbrwps:6533

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Keywords: Labor Markets; Microfinance; Small Scale Enterprise; Environmental Economics&Policies; Labor Policies;

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  1. Bevan, Alan A. & Estrin, Saul, 2004. "The determinants of foreign direct investment into European transition economies," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 775-787, December.
  2. Neumark, David & Wall, Brandon & Zhang, Junfu, 2008. "Do Small Businesses Create More Jobs? New Evidence for the United States from the National Establishment Time Series," IZA Discussion Papers 3888, Institute for the Study of Labor (IZA).
  3. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 70(2), pages 317-341, 04.
  4. Oberhofer, Harald & Pfaffermayr, Michael, 2010. "Firm Growth in Multinational Corporate Groups," Working Papers in Economics and Finance, University of Salzburg 2010-7, University of Salzburg.
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  8. Peter Huber & Harald Oberhofer & Michael Pfaffermayr, 2012. "Who Creates Jobs? Estimating Job Creation Rates at the Firm Level," WIFO Working Papers, WIFO 435, WIFO.
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  12. P. Hart, 2000. "Theories of Firms' Growth and the Generation of Jobs," Review of Industrial Organization, Springer, Springer, vol. 17(3), pages 229-248, November.
  13. Cuaresma, Jesus Crespo & Oberhofer, Harald & Smits, Karlis & Vincelette, Gallina A, 2012. "Drivers of convergence in eleven eastern European countries," Policy Research Working Paper Series 6185, The World Bank.
  14. P. A. Geroski, 2005. "Understanding the implications of empirical work on corporate growth rates," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 129-138.
  15. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
  16. Dirk Pilat & Agnès Cimper & Karsten Bjerring Olsen & Colin Webb, 2006. "The Changing Nature of Manufacturing in OECD Economies," OECD Science, Technology and Industry Working Papers 2006/9, OECD Publishing.
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