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Demography and Innovative Entrepreneurship

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  • Werner Bönte
  • Oliver Falck
  • Stephan Heblich

Abstract

Demographic change will be one of the major challenges for economic policy in the developed world in the next decades. In this article, we analyze the relationship between age structure and the number of startups. We argue that an individual’s decision to start a business is determined by his or her age and, therefore, that a change in a region’s age distribution affects the expected number of startups in the region. Using German regional data, we estimate a count-data model and find that the expected number of startups is positively influenced by the fraction of individuals of working age—20–64 years old. A more detailed analysis of the working-age distribution suggests that startups in knowledge-based (high-tech) manufacturing industries are affected by changes in this distribution whereas firms in other industries are not. In particular, increases in the fraction of individuals in the 20–30 age range and individuals in the 40–50 age range have a positive effect on the number of high-tech startups.

Suggested Citation

  • Werner Bönte & Oliver Falck & Stephan Heblich, 2007. "Demography and Innovative Entrepreneurship," CESifo Working Paper Series 2115, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2115
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    References listed on IDEAS

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    Cited by:

    1. Richter, Doreen, 2014. "Demographic change and innovation: The ongoing challenge from the diversity of the labor force," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 25(3), pages 166-184.
    2. Jan de Kok & Tommy Span, 2014. "Ageing and entrepreneurship across Dutch regions," Scales Research Reports H201409, EIM Business and Policy Research.
    3. Dietmar Harhoff, 2008. "Innovation, Entrepreneurship und Demographie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 9(3), pages 46-72, August.
    4. Theuer, Sebastian & Gottschalk, Sandra, 2008. "Die Auswirkungen des demografischen Wandels auf das Gründungsgeschehen in Deutschland," ZEW Discussion Papers 08-032, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Jan de Kok & Ingrid Verheul & Abdelfatah Ichou, 2010. "New Firm Performance: Does the Age of Founders Affect Employment Creation?," Scales Research Reports H201015, EIM Business and Policy Research.
    6. Hannu Tervo, 2014. "Who turns to entrepreneurship later in life? - Push and pull in Finnish rural and urban areas," ERSA conference papers ersa14p236, European Regional Science Association.
    7. Katharina Frosch, 2009. "Do only new brooms sweep clean? A review on workforce age and innovation," MPIDR Working Papers WP-2009-005, Max Planck Institute for Demographic Research, Rostock, Germany.
    8. Werner, Arndt & Faulenbach, Nicole, 2008. "Das Gründungsverhalten Älterer: Eine empirische Analyse mit den Daten des Gründerpanels des IfM Bonn," IfM-Materialien 184, Institut für Mittelstandsforschung (IfM) Bonn.

    More about this item

    Keywords

    demography; age distribution; entrepreneurship; innovation; region;

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • 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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