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Startup Types and Macroeconomic Performance in Europe

Author

Listed:
  • De Haas, Ralph
  • Sterk, Vincent
  • van Horen, Neeltje

Abstract

We construct a new dataset of 1.3 million European startups. Cluster analysis identifies five startup types present across countries, industries, and cohorts. Initial differences across types persist, and each displays a characteristic life cycle in productivity, employment, and survival. We embed these startup types in a firm dynamics model with heterogeneous entry, investment, and financing, and quantify how policy can shift cohort composition. Differentiated corporate tax reforms favoring high-performance types yield substantial productivity gains. Uniform fiscal instruments differ sharply: capital subsidies raise output and productivity through composition effects, labor subsidies reduce them, and interest subsidies are roughly neutral.

Suggested Citation

  • De Haas, Ralph & Sterk, Vincent & van Horen, Neeltje, 2022. "Startup Types and Macroeconomic Performance in Europe," CEPR Discussion Papers 17400, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:17400
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    File URL: https://cepr.org/publications/DP17400
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    Cited by:

    1. is not listed on IDEAS
    2. Christian Fons-Rosen & Pau Roldan-Blanco & Tom Schmitz, 2022. "The Effects of Startup Acquisitions on Innovation and Economic Growth," Working Papers 944, Queen Mary University of London, School of Economics and Finance.

    More about this item

    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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