IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa03p268.html
   My bibliography  Save this paper

The determinants of regional differences in new firm formation in West-Germany

Author

Listed:
  • Udo Brixy

  • Michael Niese

Abstract

Differences in the spatial patters of the intensity of new firm formation have attracted the intrest of researchers for a long time. Usally birth-rates or sometimes count-data is used to explain the spatial pattern with a variety of independend variables. Starting from a Shift-Share-analysis we examine the regional share of the number of newly founded firms in 74 West-German planning regions between 1987 and 1997. The regional share has the advantage that effects of different regional industry-structures as well as different size-structures are excluded. Therefore, by analysing the regional share, the factors determing the number of newly founded firms apart from industry-structure and regional size can be examined very clearly. The structure of the data allows us to apply a panel-regression appraoch with fixed effects. There are four main results of our estimations. First agglomeration-effects are of great importance for the number of newly founded firms. Regions with a high density of population provide a better environment for entrepreneurs. Furthermore, agglomeration-effects shape the correlation between the regional share and other regional characteristics, too. Usually a high share of employees working in SMEs and especially a high proportion of R&D in SME are rated as signs for the existence of a ”seed-bed” for entrepreneurs. But in our analysis these variables show a negative influence on the number of newly founded firms. Our conclusion is that this is because these variables indicate missing agglomeration-effects. SMEs are typical for rural and peripheral locations. Secondly, there is a tendency that the properties that are favourable for starting new businesses are less favourable for the survival of newly founded firms. We are the opinion that this is at least partially the result of a high degree of competition between newly founded firms. Thirdly, high rates of unemployment and growing numbers of unemployed result in growing numbers of newly founded firms. Because of missing alternatives on the labour market, people tend to start their own businesses more easily than in regions with a lesser degree of unemployment. Fourthly, we found a high degree of spatial autocorrelation. ”Neighbouring regions have much in common” that result in similar values of the regional share. But it could be shown that this is not due to common factors that are missing in our analysis.

Suggested Citation

  • 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.
    • Handle: RePEc:wiw:wiwrsa:ersa03p268
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa03/cdrom/papers/268.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fritsch, Michael & Falck, Oliver, . "New firm formation by industry over space and time: a multi-level analysis for Germany," Chapters in Economics,, University of Munich, Department of Economics.
    2. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
    3. repec:diw:diwwpp:dp322 is not listed on IDEAS
    4. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Josep‐Maria Arauzo‐Carod & Mercedes Teruel‐Carrizosa, 2005. "An Urban Approach to Firm Entry: The Effect of Urban Size," Growth and Change, Wiley Blackwell, vol. 36(4), pages 508-528, September.
    2. 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.
    3. Michael Fritsch & Alexandra Schroeter, 2011. "Why does the effect of new business formation differ across regions?," Small Business Economics, Springer, vol. 36(4), pages 383-400, May.
    4. Sierdjan Koster, 2007. "The Entrepreneurial And Replication Function Of New Firm Formation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 98(5), pages 667-674, December.
    5. José A. Belso Martínez, 2005. "Equilibrium entrepreneurship rate, economic development and growth. Evidence from Spanish regions," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 17(2), pages 145-161, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. 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.
    4. 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].
    5. 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.
    6. Rui Baptista & Vítor Escária & Paulo Madruga, 2008. "Entrepreneurship, regional development and job creation: the case of Portugal," Small Business Economics, Springer, vol. 30(1), pages 49-58, January.
    7. 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.
    8. Fritsch, Michael, 2003. "Zum Zusammenhang zwischen Gründungen und regionaler Entwicklung," Freiberg Working Papers 2003/04, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    9. Mabel Pisá-Bó & José Fernando López-Muñoz & Josefina Novejarque-Civera, 2021. "The ever-changing socioeconomic conditions for entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 17(3), pages 1335-1355, September.
    10. Francesca Lotti & Enrico Santarelli, 2004. "Industry Dynamics and the Distribution of Firm Sizes: A Nonparametric Approach," Southern Economic Journal, John Wiley & Sons, vol. 70(3), pages 443-466, January.
    11. Roberta Capello & Camilla Lenzi, 2016. "Innovation modes and entrepreneurial behavioral characteristics in regional growth," Small Business Economics, Springer, vol. 47(4), pages 875-893, December.
    12. Dan Johansson, 2005. "The Turnover of Firms and Industry Growth," Small Business Economics, Springer, vol. 24(5), pages 487-495, June.
    13. Frédéric Delmar & Karl Wennberg & Karin Hellerstedt, 2011. "Endogenous growth through knowledge spillovers in entrepreneurship : an empirical test," Post-Print hal-02312920, HAL.
    14. Alessandra Colombelli & Gianluca Orsatti & Francesco Quatraro, 2021. "Local knowledge composition and the emergence of entrepreneurial activities across industries: evidence from Italian NUTS-3 regions," Small Business Economics, Springer, vol. 56(2), pages 613-635, February.
    15. Josep Arauzo Carod & Daniel Liviano Solís & Mònica Martín Bofarull, 2008. "New business formation and employment growth: some evidence for the Spanish manufacturing industry," Small Business Economics, Springer, vol. 30(1), pages 73-84, January.
    16. M.A. Carree & A.R. Thurik, 2008. "The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries," Small Business Economics, Springer, vol. 30(1), pages 101-110, January.
    17. Silvia Rocchetta & Andrea Mina, 2019. "Technological coherence and the adaptive resilience of regional economies," Regional Studies, Taylor & Francis Journals, vol. 53(10), pages 1421-1434, October.
    18. Rodica Crudu, 2019. "The Role of Innovative Entrepreneurship in the Economic Development of EU Member Countries," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 15(1), pages 35-60.
    19. Zoltán J. Ács & Pontus Braunerhjelm & David B. Audretsch & Bo Carlsson, 2015. "The knowledge spillover theory of entrepreneurship," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 7, pages 129-144, Edward Elgar Publishing.
    20. Fritsch, Michael & Mueller, Pamela, 2004. "Regional growth regimes revisited - the case of West Germany," Freiberg Working Papers 2004/06, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa03p268. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.