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The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?


  • Adriaan Van Stel
  • David Storey


Van Stel A. J. and Storey D. J. (2004) The link between firm births and job creation: is there a Upas Tree effect?, Regional Studies38, 893-909. This paper examines the relationship between firm births and job creation in Great Britain. It uses a new data set for 60 British regions, covering the whole of Great Britain, between 1980 and 1998. For Great Britain as a whole, no significant relationship between start-ups and employment creation is found in the 1980s, but there is a negative relationship for the 'low enterprise' area of the North East of England. For the 1990s, a significant positive relationship for Great Britain as a whole is found, but for Scotland, which focused policy on start-ups, a negative relationship is found. The authors feel this raises questions over policies designed to raise rates of new firm formation as a strategy for employment creation, particularly in 'low enterprise' areas. Van Stel A. J. et Storey D. J. (2004) Le lien entre la creation d'entreprise et la creation d'emploi: l'effet Upas, existe-t'il?, Regional Studies38, 893-909. Cet article cherche a examiner le lien entre la creation d'entreprise et la creation d'emploi en Grande-Bretagne. On emploie un nouvel ensemble de donnees portant sur la periode de 1988 a 1998 et pour 60 zones britanniques couvrant toute la Grande-Bretagne. Pour la Grande-Bretagne dans son ensemble, il ne s'avere aucun lien important entre la creation d'entreprise et la creation d'emploi dans les annees 1980, mais un lien negatif pour ce qui est de la zone dite 'a faible entreprise', a savoir le nord-est d'Angleterre. Pour les annees 1990, il s'avere un lien positif important pour la Grande-Bretagne dans son ensemble, a la difference de l'Ecosse ou la politique a porte sur la creation d'entreprise et qui fait preuve d'un lien negatif. Par la suite, des questions se posent sur les politiques qui cherchent a augmenter le taux de creation d'entreprise dans le but de creer des emplois, surtout dans les zones dites a 'faible entreprise'. Van Stel A. J. und Storey D. J. (2004) Die Verknupfung von Firmengrundung und Arbeitsbeschaffung: Gibt es einen Upasbaumeffekt?, Regional Studies 38, 893-909. Dieser Aufsatz untersucht die Beziehung zwischen Firmengrundung und Arbeitsbeschaffung in Grossbritannien. Dazu werden neue Datenreihen fur 60 britische Regionen benutzt, die ganz Grossbritannien im Zeitraum 1980-98 erfassen. Fur Grossbritannien als Ganzes ergab sich wahrend der achtziger Jahre keine signifikante Beziehung zwischen Firmengrundung und Arbeitsbeschaffung, doch eine negative in den 'unternehmensschwachen' Gebieten Nordostenglands. Fur die neunziger Jahre wird fur Grossbritannien insgesamt ein signifkant positives Verhaltnis festgestellt, aber ein negatives in Schottland, das seine Bestrebungen auf Firmengrundungen konzentrierte. Dies wirft Fragen betreff Bestrebungen auf, die speziell auf Anhebung von Firmengrundungen als Strategie zur Beschaffung von Arbeitsplatzen abzielten, besonders in 'unternehmensschwachen' Gebieten. Van Stel A. J. y Storey D. J. (2004) El vinculo entre los nacimientos de empresas y la creacion de empleo: existe un efecto Upas Tree?, Regional Studies38, 893-909. Este articulo examina la relacion entre los nacimientos de empresas y la creacion de empleo en Gran Bretana. Utilizamos una nueva base de datos para 60 regiones britanicas, cubriendo Gran Bretana en su totalidad, entre 1980 y 1998. Para Gran Bretana en su totalidad no encontramos ninguna relacion significativa entre las nuevas empresas y la creacion de empleo en los anos 80, pero si encontramos una relacion negativa para la zona de 'baja actividad emprendedora' del Noreste de Inglaterra. Para los anos 90 encontramos una relacion positiva significativa para Gran Bretana en su totalidad, sin embargo, para Escocia, que concentro sus politicas en la creacion de empresas, encontramos una relacion negativa. Creemos que esto plantea cuestiones sobre politicas disenadas a aumentar los indices de formacion de nuevas empresas como estrategia de creacion de empleo, particularmente en zonas de 'baja actividad emprendedora'.

Suggested Citation

  • 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, vol. 38(8), pages 893-909.
  • Handle: RePEc:taf:regstd:v:38:y:2004:i:8:p:893-909
    DOI: 10.1080/0034340042000280929

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    References listed on IDEAS

    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Cressy, Robert, 1996. "Are Business Startups Debt-Rationed?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1253-1270, September.
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    8. Murray Z. Frank, 1988. "An Intertemporal Model of Industrial Exit," The Quarterly Journal of Economics, Oxford University Press, vol. 103(2), pages 333-344.
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    More about this item


    New firm start-ups; Employment growth; Entrepreneurship; Great Britain;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes


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