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New firm formation by industry over space and time: a multi-level analysis for Germany

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  • Fritsch, Michael
  • Falck, Oliver

Abstract

We apply a multi-level approach to analyze the effect of three groups of determinants on new firm formation simultaneously: industry, location and changes over time. The data are for West Germany and cover the 1983-97 period. Our analysis indicates, that innovation activities and the technological regime play a significant role for new firm formation processes. There are also considerable differences with regard to the impact of a number of variables on startups between manufacturing and the service sector. Changes in demand are conducive for new firm formation while a high level of unemployment in a region obviously makes a relatively uncomfortable environment for start-ups. JEL classification: D21, L10, R10 Keywords: New firm formation, industrial economics, regional economics, entrepreneurship.

Suggested Citation

  • Fritsch, Michael & Falck, Oliver, 2002. "New firm formation by industry over space and time: a multi-level analysis for Germany," ERSA conference papers ersa02p486, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa02p486
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    References listed on IDEAS

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    1. Brixy, Udo & Grotz, Reinhold, 2006. "Regional patterns and determinants of new firm formation and survival in western Germany," IAB-Discussion Paper 200605, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Michael Fritsch & Pamela Mueller, 2007. "The persistence of regional new business formation-activity over time – assessing the potential of policy promotion programs," Journal of Evolutionary Economics, Springer, vol. 17(3), pages 299-315, June.
    3. Daunfeldt, Sven-Olov & Orth, Matilda & Rudholm, Niklas, 2005. "Entry into Local Retail Food Markets in Sweden: A Real-Options Approach," Working Papers in Economics 170, University of Gothenburg, Department of Economics.
    4. Michael Stuetzer & Martin Obschonka & Udo Brixy & Rolf Sternberg & Uwe Cantner, 2014. "Regional characteristics, opportunity perception and entrepreneurial activities," Small Business Economics, Springer, vol. 42(2), pages 221-244, February.
    5. Udo Brixy & Michael Niese, 2003. "The determinants of regional differences in new firm formation in West-Germany," ERSA conference papers ersa03p268, European Regional Science Association.
    6. Michael Fritsch & Udo Brixy & Oliver Falck, 2006. "The Effect of Industry, Region, and Time on New Business Survival – A Multi-Dimensional Analysis," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(3), pages 285-306, May.
    7. 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.
    8. Jitendra Parajuli & Kingsley E. Haynes, 2017. "Panel Data Models of New Firm Formation in New England," REGION, European Regional Science Association, vol. 4, pages 65-76.
    9. Wagner, Joachim & Sternberg, Rolf, 2002. "Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the REM Germany," IZA Discussion Papers 624, Institute of Labor Economics (IZA).
    10. Fritsch, Michael & Stephan, Andreas, 2004. "What causes cross-industry differences of technical efficiency? An empirical investigation," Freiberg Working Papers 2004/13, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    11. Michael Fritsch & Pamela Mueller, 2008. "The effect of new business formation on regional development over time: the case of Germany," Small Business Economics, Springer, vol. 30(1), pages 15-29, January.
    12. Mrożewski Matthias, 2014. "An Empirical Analysis of Economic and Socio-Demographic Determinants of Entrepreneurship Across German Regions," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 42(1), pages 60-80, June.
    13. Michael Fritsch, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Journal of Evolutionary Economics, Springer, vol. 14(5), pages 525-542, December.
    14. Joachim Ragnitz & Stefan Eichler & Beate Henschel & Harald Lehmann & Carsten Pohl & Lutz Schneider & Helmut Seitz & Marcel Thum, 2007. "Die demographische Entwicklung in Ostdeutschland : Gutachten im Auftrag des Bundesministeriums für Wirtschaft und Technologie," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 41, September.
    15. Heiko Bergmann & Rolf Sternberg, 2007. "The Changing Face of Entrepreneurship in Germany," Small Business Economics, Springer, vol. 28(2), pages 205-221, March.
    16. Bruder, Jana & Räthke-Döppner, Solvig, 2008. "Ethnic minority self-employment in Germany: Geographical distribution and determinants of regional variation," Thuenen-Series of Applied Economic Theory 100, University of Rostock, Institute of Economics.
    17. Backman, Mikaela & Karlsson, Charlie, 2013. "Determinants of entrepreneurship. Is it all about the individual or the region?," Working Paper Series in Economics and Institutions of Innovation 338, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    18. Jitendra Parajuli & Kingsley E. Haynes, 2015. "Broadband Internet and new firm formation: a US perspective," Chapters, in: Charlie Karlsson & Urban Gråsjö & Sofia Wixe (ed.), Innovation and Entrepreneurship in the Global Economy, chapter 9, pages 210-236, Edward Elgar Publishing.
    19. Erik E. Lehmann & Matthias Menter & Katharine Wirsching, 2022. "University spillovers, absorptive capacities, and firm performance," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(1), pages 125-150, March.
    20. Conen, Wieteke & Schippers, Johannes Jan & Schulze Buschoff, Karin, 2016. "Self-employed without personnel between freedom and insecurity," WSI Studies 05, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    21. Niels Bosma & R. Sternberg & Zoltan Acs, 2008. "The Entrepreneurial Advantage of World Cities," Scales Research Reports H200810, EIM Business and Policy Research.
    22. Shaoming Cheng & Huaqun Li, 2011. "Spatially Varying Relationships of New Firm Formation in the United States," Regional Studies, Taylor & Francis Journals, vol. 45(6), pages 773-789.

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    More about this item

    Keywords

    new firm formation; industrial economics; regional economics; entrepreneurship.;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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