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Business Cycles and Start-ups across Industries: an Empirical Analysis for Germany

Author

Listed:
  • Alexander Konon

    () (German Institute for Economic Research (DIW Berlin))

  • Michael Fritsch

    () (FSU Jena)

  • Alexander Kritikos

    () (German Institute for Economic Research (DIW Berlin), University of Potsdam, IZA, and IAB)

Abstract

We analyze whether start-up rates in different industries systematically change with business cycle variables. We mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the large-scale industries, including the innovative part of the manufacturing sector, are more strongly influenced by changes in the cyclical component of unemployment, while entries into small-scale industries, like the knowledge intensive services, are merely influenced by changes in the cyclical component of GDP. Business formation may therefore have a stabilizing effect on the economy.

Suggested Citation

  • Alexander Konon & Michael Fritsch & Alexander Kritikos, 2017. "Business Cycles and Start-ups across Industries: an Empirical Analysis for Germany," Jena Economic Research Papers 2017-013, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2017-013
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    More about this item

    Keywords

    New business formation; Entrepreneurship; business cycle; manu- facturing; services; innovative industries;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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