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The Relationship between Firm Births and Job Creation: Did this change in Britain in the 1990s?

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  • André van Stel
  • David Storey

Abstract

This paper examines the relationship between firm births and job creation in Great Britain. We used a new data set for 60 British regions, covering the whole of Great Britain, between 1980 and 1998. The central theme of the paper is that, with the exception of a recent paper by Audretsch and Fritsch for Germany, the relationship between new-firm startups and employment growth has previously been examined either with no time-lag or with only a short period lag. The current paper examines short-run as well as long-run relationships and provides results for Great Britain similar to those for Germany. We find that the short-run employment impact of new-firm startups in British regions has been bigger in the 1990s compared to the 1980s. Concerning long-run effects, we find that the employment impact of new-firm startups is strongest after about five years, but the effect disappears after a decade.

Suggested Citation

  • André van Stel & David Storey, 2002. "The Relationship between Firm Births and Job Creation: Did this change in Britain in the 1990s?," Scales Research Reports N200202, EIM Business and Policy Research.
    • Handle: RePEc:eim:papers:n200202
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