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New business formation and employment growth: some evidence for the Spanish manufacturing industry

  • Arauzo Carod, Josep Maria
  • Liviano Solís, Daniel
  • Martín Bofarull, Mònica
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    This paper explores the effects of new business formation on employment growth in Spanish manufacturing industries. New firms are believed to make an important contribution to economic growth but the extent of this contribution is unclear. We consider time lags of new firm formation as explanatory variables of employment change and identify how long the effect of new firm entries on employment lasts. Our main results show that the effects of new business formation are positive in the short term, negative in the medium term and positive in the long term, thus confirming the existence of indirect supply-side effects found in similar studies for other countries. Key words: regional growth, firm entry, time lags and Spanish economy. JEL classifications: L00, L60, R11, R12

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    File URL: http://hdl.handle.net/2072/3686
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    Paper provided by Universitat Rovira i Virgili, Department of Economics in its series Working Papers with number 2072/3686.

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    Date of creation: 2006
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    Handle: RePEc:urv:wpaper:2072/3686
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