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The direct employment effects of new businesses in Germany revisited: an empirical investigation for 1976–2004

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  • Yvonne Schindele

  • Antje Weyh

Abstract

Based on an improved and extended database, the Establishment History Panel, we extend the analysis of Fritsch & Weyh (2006) by investigating the development of employment in German start-up cohorts for the period 1976 to 2004. We conïfirm the typical pattern of an initial increasing and then soon decreasing number of employees in start-up cohorts. Furthermore, we provide some of the first evidence for the "liability of aging" phenomena in Germany. Older firms face a relatively high risk of failure. Although only the largest 25% of the surviving entries grow in terms of employment, after 25 years the number of employees in these relatively large businesses strongly declines.
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  • Yvonne Schindele & Antje Weyh, 2011. "The direct employment effects of new businesses in Germany revisited: an empirical investigation for 1976–2004," Small Business Economics, Springer, vol. 36(3), pages 353-363, April.
    • Handle: RePEc:kap:sbusec:v:36:y:2011:i:3:p:353-363
    DOI: 10.1007/s11187-009-9218-2
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    1. Robert Cressy, 2006. "Why do Most Firms Die Young?," Small Business Economics, Springer, vol. 26(2), pages 103-116, March.
    2. Michael Fritsch, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Journal of Evolutionary Economics, Springer, vol. 14(5), pages 525-542, December.
    3. P. A. Geroski & José Mata & Pedro Portugal, 2010. "Founding conditions and the survival of new firms," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 510-529, May.
    4. Michael Fritsch & Udo Brixy & Oliver Falck, 2006. "The Effect of Industry, Region, and Time on New Business Survival – A Multi-Dimensional Analysis," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(3), pages 285-306, May.
    5. Wagner, Joachim, 1994. "The Post-entry Performance of New Small Firms in German Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 141-154, June.
    6. Fritsch, Michael & Weyh, Antje, 2004. "How large are the direct employment effects of new businesses? An empirical investigation," Freiberg Working Papers 2004/05, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    7. Michael Fritsch & Antje Weyh, 2006. "How Large are the Direct Employment Effects of New Businesses? An Empirical Investigation for West Germany," Small Business Economics, Springer, vol. 27(2), pages 245-260, October.
    8. Antje Weyh, 2006. "What Characterizes Successful Start-Up Cohorts?," International Studies in Entrepreneurship, in: Michael Fritsch & Juergen Schmude (ed.), Entrepreneurship in the Region, chapter 4, pages 61-74, Springer.
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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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