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Schumpeterian 'Creative Destruction' and Strengthening the Business Stock Through Firm Formation

Author

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  • James Derbyshire

    (Management School, University of Liverpool, UK)

  • Garry Haywood

Abstract

Atherton (2006) has noted that the current policy preoccupation with increasing start-up levels is often justified in terms of Schumpeterian creative destruction which facilitates evolutionary strengthening in the business stock. This article seeks to consider the validity of this justification. Beyond this, this article shows that the most commonly employed measures of firm formation, the ‘business stock’ and ‘labour market’ approaches, and the most commonly employed dataset, the VAT data, are inadequate for assessing policy couched in Schumpeterian terms as they are unable to account for the evolution of the business stock. A new dataset employing new measures better able to account for the challenge to the business stock brought about by formation is introduced.

Suggested Citation

  • James Derbyshire & Garry Haywood, 2007. "Schumpeterian 'Creative Destruction' and Strengthening the Business Stock Through Firm Formation," Working Papers 200739, University of Liverpool, Department of Economics.
    • Handle: RePEc:liv:livedp:200739
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    References listed on IDEAS

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