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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

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  • Falck, Oliver

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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. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-559, November.
    2. Beesley, M E & Hamilton, R T, 1984. "Small Firms' Seedbed Role and the Concept of Turbulence," Journal of Industrial Economics, Wiley Blackwell, vol. 33(2), pages 217-231, December.
    3. David Audretsch & Michael Fritsch, 1999. "The Industry Component of Regional New Firm Formation Processes," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(3), pages 239-252, November.
    4. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    5. Birley, Sue, 1985. "The role of networks in the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 1(1), pages 107-117.
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    Citations

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    Cited by:

    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. 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.
    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. 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.
    6. Jitendra Parajuli & Kingsley E. Haynes, 2015. "Broadband Internet and new firm formation: a US perspective," Chapters,in: Innovation and Entrepreneurship in the Global Economy, chapter 9, pages 210-236 Edward Elgar Publishing.
    7. Niels Bosma & R. Sternberg & Zoltan Acs, 2008. "The Entrepreneurial Advantage of World Cities," Scales Research Reports H200810, EIM Business and Policy Research.
    8. Wagner, Joachim & Sternberg, Rolf, 2002. "Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the REM Germany," IZA Discussion Papers 624, Institute for the Study of Labor (IZA).
    9. 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.

    More about this item

    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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