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Firm Entry and Exit in Local Markets: Market Pull and Unemployment Push


  • Marcus Dejardin

    () (CERPE, University of Namur-FUNDP)

  • Martin Carree

    () (Maastricht University)


Firm entry and exit flows in the retailing and consumer services may be viewed as market equilibrating processes. Local markets with considerable market room and high unemployment ought to be characterized by high subsequent entry rates and low exit rates. However, lack of entrepreneurial alertness may inhibit this. We examine the relationship and obtain empirical results for a range of selected industries in 563 Belgian municipalities. We show that, over a three-year period, (net) entry is positively affected by the presence of local 'market room' and also by future market pull. We find 'unemployment push' effect on entry in easy-to-enter industries, but also a significant effect of unemployment on exit.

Suggested Citation

  • Marcus Dejardin & Martin Carree, 2011. "Firm Entry and Exit in Local Markets: Market Pull and Unemployment Push," Working Papers 1114, University of Namur, Department of Economics.
  • Handle: RePEc:nam:wpaper:1114

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    References listed on IDEAS

    1. Adriaan Van Stel & David Storey, 2004. "The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 893-909.
    2. Marcus Dejardin, 2006. "L'entrepreneuriat, le territoire et les conditions de leurs dynamiques cumulatives," Revue d'├ęconomie r├ęgionale et urbaine, Armand Colin, vol. 0(2), pages 185-201.
    3. Hattwick, Richard E., 1979. "Perception, opportunity and profit : Studies in the Theory of Entrepreneurship. By Israel M. Kirzner. Chicago: The University of Chicago Press, 1980. Pp. 239. Price: $15.00," Journal of Behavioral Economics, Elsevier, vol. 8(2), pages 183-188.
    4. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-846, September.
    5. Schultz, Theodore W, 1980. " Investment in Entrepreneurial Ability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 82(4), pages 437-448.
    6. Daniel Serra & Charles Revelle & Ken Rosing, 1999. "Surviving in a competitive spatial market: The threshold capture model," Economics Working Papers 359, Department of Economics and Business, Universitat Pompeu Fabra.
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    Cited by:

    1. Katharina Pijnenburg, 2013. "Self-Employment and Economic Performance: A Geographically Weighted Regression Approach for European Regions," Discussion Papers of DIW Berlin 1272, DIW Berlin, German Institute for Economic Research.

    More about this item


    Entrepreneurship; Entry; Exit; Entrepreneurship; Unemployment;

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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