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Effects of New Business Formation on Regional Development over Time

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  • Michael Fritsch
  • Pamela Mueller

Abstract

Fritsch M. and Mueller P. (2004) Effects of new business formation on regional development over time, Regional Studies38, 961-975. In the analysis of the impact of new business formation on regional employment change, considerable time lags were identified. The structure and extent of these time lags were investigated by applying the Almon lag model and it was found that new firms can have both a positive and a negative effect on regional employment. The results indicate that the indirect effects of new business formation (crowding out of competitors, improvement of supply conditions and improved competitiveness) are of greater magnitude than the direct effect, i.e. the jobs created in the new entities. The peak of the positive impact of new businesses on regional development is reached about 8 years after entry. Fritsch M. et Mueller P. (2004) Les effets temporels de la creation d'entreprise sur l'amenagement du territoire, Regional Studies38, 961-975. Cette analyse des effets de la creation d'entreprise sur l'amenagement du terriotire identifie d'importants decalages dans le temps. On examine la structure et la portee de ces decalages en appliquant le modele Almon. Il s'avere que les nouvelles entreprises font preuves d'effets postifs et negatifs sur l'emploi regional. Les resultats portent a croire que les effets indirects de la creation d'entreprise (l'eviction des concurrents, l'amelioration des conditions de l'offre, et une competitivite accrue) sont d'une plus grande importance que ne l'est l'effet direct, c'est a dire les emplois crees dans les nouveaux etablissements. L'effet positif des nouvelles entreprises sur l'amenagement du territoire touche a son maximum environ huit annees apres la creation de celles-la. Fritsch M. und Mueller P. (2004) Der Einfluss von Grundungsprozessen auf die Regionalentwicklung im Zeitablauf, Regional Studies38, 961-975. Fur den Einfluss von Grundungsaktivitaten auf die Regionalentwicklung lassen sich erhebliche Zeitverzogerungen feststellen. Wir analysieren das Ausmass und die Struktur dieser Zeitverzogerungen mit dem Almon-Lag Verfahren. Die Ergebnisse zeigen, dass Grundungen sowohl einen positiven als auch einen negativen Einfluss auf das Beschaftigungsniveau haben konnen. Allgemein scheinen die indirekten Effekte des Grundungsgeschehens (Verdrangung etablierter Konkurrenten, Verbesserung des Angebots und gesteigerte Wettbewerbsfahigkeit) starker ausgepragt zu sein als der direkte Effekt, gemessen als die in den neuen Firmen entstandenen Arbeitsplatze. Das Maximum des positiven Einflusses der Grundungen auf die Regionalenwicklung wird nach ca. acht Jahren erreicht. Fritsch M. y Mueller P. (2004) Los efectos de la formacion de nuevas empresas en el desarrollo regional a lo largo del tiempo, Regional Studies38, 961-975. En el analisis del impacto de la formacion de nuevas empresas sobre la variacion en el empleo regional se identifican retardos temporales considerables. Nosostros investigamos la estructura y el grado de estos retardos mediante la aplicacion del modelo de retardos de Almon y encontramos que las nuevas empresas pueden tener tanto un efecto positivo como negativo en el empleo regional. Los resultados indican que los efectos indirectos de la formacion de nuevas empresas (desplazamiento de competidores, mejora de las condiciones de oferta y mejora de la competitividad) son de una magnitud mayor que el efecto directo, es decir, los empleos que se crean en las nuevas entidades. El impacto positivo de las nuevas empresas en el desarrollo regional alcanza su nivel mas alto unos ocho anos despues de su entrada.

Suggested Citation

  • Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
  • Handle: RePEc:taf:regstd:v:38:y:2004:i:8:p:961-975
    DOI: 10.1080/0034340042000280965
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    References listed on IDEAS

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    More about this item

    Keywords

    Regional growth; New businesses; Entrepreneurship; Time lags;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • 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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