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Start-ups, Long- and Short-Term Survivors and their Effect on Regional Employment Growth

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  • Michael Fritsch

    ()

  • Florian Noseleit

    ()

Abstract

We investigate the effects that regional start-up activity has on employment in new and in incumbent businesses. The analysis is performed for West German regions over the 1987-2002 period. It shows that the effects of new businesses on employment in the incumbents are significantly positive and that this indirect effect on incumbent employment leads to more jobs than what is created by the newcomers. We find that the effect of new business formation on incumbents is exclusively driven by start-ups that survive a certain period of time. We draw conclusions for policy and for further research.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1102.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p1102

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Cited by:
  1. 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.
  2. 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.

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