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The Impact of New Firm Formation on Regional Development in the Netherlands

  • van Stel, A.J.
  • Suddle, K.

This paper examines the relationship between new firm formation and regional employment change in the Netherlands. Using a new regional data base for the period 1988-2002, we examine the time lags involved in the relationship. We also investigate whether the relationship differs by time period, by sector and by degree of urbanization. We find that the maximum effect of new businesses on regional development is reached after about six years. Our results also suggest that the overall employment impact of new-firm startups is positive but that the immediate employment effects may be small in the Netherlands. Furthermore, we find that the relation between new businesses and regional development has been stable during the period under investigation, that the employment impact of new firms is strongest in manufacturing industries and that the employment impact of new firms is stronger in areas with a higher degree of urbanization.

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File URL: http://repub.eur.nl/pub/7131/ERS%202005%20075%20ORG.pdf
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Paper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam in its series ERIM Report Series Research in Management with number ERS-2005-075-ORG.

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Date of creation: 30 Nov 2005
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Handle: RePEc:ems:eureri:7131
Contact details of provider: Postal: RSM Erasmus University & Erasmus School of Economics, PoBox 1738, 3000 DR Rotterdam
Phone: 31-10-408 1182
Fax: 31-10-408 9020
Web page: http://www.erim.eur.nl/
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  1. Pamela Mueller & André van Stel & David J. Storey, 2006. "The effects of new firm formation on regional development over time: The case of Great Britain," Papers on Entrepreneurship, Growth and Public Policy 2006-24, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  2. Broersma, Lourens & Gautier, Pieter, 1997. " Job Creation and Job Destruction by Small Firms: An Empirical Investigation for the Dutch Manufacturing Sector," Small Business Economics, Springer, vol. 9(3), pages 211-24, June.
  3. Claudia Werker & Suma Athreye, 2004. "Marshall’s disciples: knowledge and innovation driving regional economic development and growth," Journal of Evolutionary Economics, Springer, vol. 14(5), pages 505-523, December.
  4. André van Stel & Jeroen de Jong & Jolanda Hessels & Chantal Hartog, 2010. "Global Entrepreneurship Monitor 2009 The Netherlands," Scales Research Reports A201011, EIM Business and Policy Research.
  5. Steven J. Davis & John Haltiwanger & Scott Schuh, 1993. "Small Business and Job Creation: Dissecting the Myth and Reassessing theFacts," NBER Working Papers 4492, National Bureau of Economic Research, Inc.
  6. Adriaan J. van Stel & David J. Storey, 2004. "The link between firm births and job creation: Is there a Upas Tree effect?," Papers on Entrepreneurship, Growth and Public Policy 2004-33, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  7. Roy Thurik & Sander Wennekers & Lorraine Uhlaner, 2002. "Entrepreneurship and economic performance: a macro perspective," Scales Research Reports N200220, EIM Business and Policy Research.
  8. Michael Fritsch & Pamela Mueller, 2008. "The effect of new business formation on regional development over time: the case of Germany," Small Business Economics, Springer, vol. 30(1), pages 15-29, January.
  9. Henry Nieuwenhuijsen & Niels Bosma, 2002. "Turbulence and Productivity; an analysis of 40 Dutch regions in the period 1988-1996," Scales Research Reports N200205, EIM Business and Policy Research.
  10. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
  11. Rui Baptista & Paulo Madruga & Vitor Escaria, . "Entrepreneurship, Regional Development and Job Creation: the Case of Portugal," Papers on Entrepreneurship, Growth and Public Policy 2005-06, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  12. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, vol. 30(1), pages 1-14, January.
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  14. Federico Pablo MartÌ, 2004. "Promoting the Entry of New Firms," Small Business Economics, Springer, vol. 22(3_4), pages 209-221, 04.
  15. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  16. Joeri Gorter & Albert van der Horst & S. Brakman & H.F.L. Garretsen & M. Schram, 2005. "New economic geography, empirics, and regional policy," CPB Special Publication 56, CPB Netherlands Bureau for Economic Policy Analysis.
  17. Audretsch, David B. & Fritsch, Michael, 1993. "A Note on the Measurement of Entry Rates," Freiberg Working Papers 1993,05, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  18. Gerke J. Hoogstra & Jouke van Dijk, 2004. "Explaining Firm Employment Growth: Does Location Matter?," Small Business Economics, Springer, vol. 22(3_4), pages 179-192, 04.
  19. Corinne Autant-Bernard, 2001. "The Geography Of Knowledge Spillovers And Technological Proximity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(4), pages 237-254.
  20. Audretsch, David B, 1998. "Agglomeration and the Location of Innovative Activity," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 18-29, Summer.
  21. Joris Meijaard, 2001. "Making sense of the New Economy," Scales Research Reports H200009, EIM Business and Policy Research.
  22. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
  23. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
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