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The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research

  • Michael Fritsch

    ()

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

This paper reviews the current state of knowledge about the effect of new business formation on regional development. After a brief sketch of the origins of research on this issue, the main results of different lines of inquiry are discussed. Main issues are the development of start-up cohorts, the relative magnitude of direct and indirect effects, and results by type of entry and by industry, as well as differences in the effects that have been found for different types of regions. After interpreting the results based on a common framework, I put forward a number of important questions for further research and draw some conclusions for entrepreneurship policy.

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File URL: http://pubdb.wiwi.uni-jena.de/pdf/wp_2011_006.pdf
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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 2011-006.

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Date of creation: 02 Feb 2011
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Handle: RePEc:jrp:jrpwrp:2011-006
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  1. David B. Audretsch & Max Keilbach, 2004. "Entrepreneurship Capital and Economic Performance," Papers on Entrepreneurship, Growth and Public Policy 2004-01, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  2. Paolo Saviotti & Andreas Pyka, 2003. "Economic Development, variety and employment," Working Papers geewp35, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
  3. Josep Arauzo Carod & Daniel Liviano Solís & Mònica Martín Bofarull, 2008. "New business formation and employment growth: some evidence for the Spanish manufacturing industry," Small Business Economics, Springer, vol. 30(1), pages 73-84, January.
  4. von Graevenitz, Georg & Harhoff, Dietmar & Weber, Richard, 2010. "The effects of entrepreneurship education," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 90-112, October.
  5. Oliver Falck, 2007. "Mayflies and long-distance runners: the effects of new business formation on industry growth," Applied Economics Letters, Taylor & Francis Journals, vol. 14(12), pages 919-922.
  6. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
  7. Audretsch, D.B. & Klomp, L. & Thurik, A.R., 2002. "Gibrat's Law: are the services different?," ERIM Report Series Research in Management ERS-2002-04-STR, 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.
  8. Rui Baptista & Vítor Escária & Paulo Madruga, 2008. "Entrepreneurship, regional development and job creation: the case of Portugal," Small Business Economics, Springer, vol. 30(1), pages 49-58, January.
  9. 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.
  10. Richard, Blundell & Rachel, Griffith & Peter, Howitt & Susanne, Prantl & Aghion, Philippe, 2009. "The Effects of Entry on Incumbent Innovation and Productivity," Scholarly Articles 4554222, Harvard University Department of Economics.
  11. Rui Baptista & Joana Mendonça, 2010. "Proximity to knowledge sources and the location of knowledge-based start-ups," The Annals of Regional Science, Springer, vol. 45(1), pages 5-29, August.
  12. Michael Fritsch & Pamela Mueller, 2006. "The Effect of New Business Formation on Regional Development over Time: The Case of Germany," Papers on Entrepreneurship, Growth and Public Policy 2006-19, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  13. Erik Stam, 2006. "Why Butterflies Don’t Leave. Locational behaviour of entrepreneurial firms," Papers on Entrepreneurship, Growth and Public Policy 2006-20, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  14. André van Stel & Roy Thurik & Chantal Hartog & Simon Parker, 2010. "The two-way relationship between entrepreneurship and economic performance," Scales Research Reports H200822, EIM Business and Policy Research.
  15. Fritsch, Michael & Falck, Oliver, 2007. "New business formation by industry over space and time: A multidimensional analysis," Munich Reprints in Economics 20306, University of Munich, Department of Economics.
  16. Marcus Dejardin, 2011. "Linking net entry to regional economic growth," Small Business Economics, Springer, vol. 36(4), pages 443-460, May.
  17. John C. Haltiwanger & Ron S. Jarmin & Javier Miranda, 2010. "Who Creates Jobs? Small vs. Large vs. Young," NBER Working Papers 16300, National Bureau of Economic Research, Inc.
  18. repec:cup:cbooks:9780521633574 is not listed on IDEAS
  19. Frank Neffke & Martin Svensson Henning, 2008. "Revealed Relatedness: Mapping Industry Space," Papers in Evolutionary Economic Geography (PEEG) 0819, Utrecht University, Section of Economic Geography, revised Dec 2008.
  20. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, 03.
  21. Henrekson, Magnus & Johansson, Dan, 2008. "Gazelles as Job Creators – A Survey and Interpretation of the Evidence," Ratio Working Papers 117, The Ratio Institute.
  22. Niels Bosma & Erik Stam & Veronique Schutjens, 2008. "Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries," Papers in Evolutionary Economic Geography (PEEG) 0813, Utrecht University, Section of Economic Geography, revised Aug 2008.
  23. Michael Fritsch, 2004. "Entrepreneurship, Entry and Performance of New Businesses Compared in two Growth Regimes: East and West Germany," Papers on Entrepreneurship, Growth and Public Policy 2004-41, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  24. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, June.
  25. 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.
  26. Zoltan Acs & Pamela Mueller, 2008. "Employment effects of business dynamics: Mice, Gazelles and Elephants," Small Business Economics, Springer, vol. 30(1), pages 85-100, January.
  27. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth. Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
  28. Koellinger, Philipp & Minniti, Maria & Schade, Christian, 2007. ""I think I can, I think I can": Overconfidence and entrepreneurial behavior," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 502-527, August.
  29. André van Stel & David Storey & Pamela Mueller, 2006. "The effects of new firm formation on regional development over time: The case of Great Britain," Scales Research Reports H200618, EIM Business and Policy Research.
  30. Wennekers, Sander & Thurik, Roy, 1999. " Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, vol. 13(1), pages 27-55, August.
  31. Audretsch, David B. & Carree, Martin A. & van Stel, André J. & Thurik, A. Roy, 2000. "Impeded industrial restructuring : the growth penalty," HWWA Discussion Papers 114, Hamburg Institute of International Economics (HWWA).
  32. Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
  33. Poh Wong & Yuen Ho & Erkko Autio, 2005. "Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data," Small Business Economics, Springer, vol. 24(3), pages 335-350, 01.
  34. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
  35. repec:cup:cbooks:9780521465618 is not listed on IDEAS
  36. Audretsch, David B. & Keilbach, Max C. & Lehmann, Erik E., 2006. "Entrepreneurship and Economic Growth," OUP Catalogue, Oxford University Press, number 9780195183511, March.
  37. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320.
  38. Ron Boschma, 2004. "Competitiveness of Regions from an Evolutionary Perspective," Regional Studies, Taylor & Francis Journals, vol. 38(9), pages 1001-1014.
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