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Start-Ups and Employment Growth - Evidence from Sweden

  • Martin Andersson

    ()

    (Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology and Jönköping International Business School (JIBS))

  • Florian Noseleit

    ()

    (Friedrich-Schiller-University Jena, School of Economics and Business Administration)

We use longitudinal data over a decade on start-ups and employment in Swedish regions and analyze the effect of start-ups on subsequent employment growth. We extend previous analyses by examining the influence of regional start-ups in a sector on regional employment growth in the same sector and on other sectors. We find differences between different types of start-ups. Knowledge-intensive start-ups seem to have larger effects on the regional economy. In particular, start-ups in high-end services have significant negative impacts on employment in other sectors but a positive long-run impact. This is consistent with the idea that start-ups are a vehicle for changes in the composition of regional industry. Moreover, our results illustrate that the known S-shaped pattern can be attributed to different effects that start-ups in a sector have on employment change in the same sector and in others.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2008-091.

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Date of creation: 09 Dec 2008
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Handle: RePEc:jrp:jrpwrp:2008-091
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