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The Persistence of Regional New Business Formation-Activity over Time – Assessing the Potential of Policy Promotion Programs

  • Michael Fritsch

    ()

  • Pamela Mueller

    ()

We investigate regional differences in the level and the development of regional new business formation activity. There is pronounced variance of start-up rates across regions. The level of regional new firm formation activity is rather path-dependent so that changes are relatively small. The main factors determining the level of regional start-up activity are innovation and entrepreneurship. In addition unemployment seems to play a role. These factors also appear to be responsible for changes in the level of regional new business formation activity and could be an appropriate starting point for policy measures trying to promote start-ups. Our empirical evidence strongly suggests that such measures may have significant effect only in the long run.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa05p706.

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Date of creation: Aug 2005
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Handle: RePEc:wiw:wiwrsa:ersa05p706
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  1. Wagner, Joachim, 2004. "Nascent Entrepreneurs," IZA Discussion Papers 1293, Institute for the Study of Labor (IZA).
  2. Andre van Stel & Viktor Stunnenberg, 2004. "Linking Business Ownership and Perceived Administrative Complexity: An Empirical Analysis of 18 OECD Countries," Papers on Entrepreneurship, Growth and Public Policy 2004-35, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  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, vol. 28(3), pages 285-306, 05.
  4. Olav Sorenson, 2003. "Social networks and industrial geography," Journal of Evolutionary Economics, Springer, vol. 13(5), pages 513-527, December.
  5. Adriaan J. van Stel & David J. Storey, 2004. "The link between firm births and job creation: Is there a Upas Tree effect?," Papers on Entrepreneurship, Growth and Public Policy 2004-33, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  6. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-38, July.
  7. 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 217-31, December.
  8. Grilo, I. & Thurik, A.R., 2004. "Determinants Of Entrepreneurship In Europe," ERIM Report Series Research in Management ERS-2004-106-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  9. Fritsch, Michael, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Freiberg Working Papers 2004,09, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  10. Audretsch, David B. & Fritsch, Michael, 1993. "A Note on the Measurement of Entry Rates," Freiberg Working Papers 1993,05, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  11. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  12. Todtling, Franz & Trippl, Michaela, 2005. "One size fits all?: Towards a differentiated regional innovation policy approach," Research Policy, Elsevier, vol. 34(8), pages 1203-1219, October.
  13. 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.
  14. Joachim Wagner & Rolf Sternberg, 2004. "Start-up activities, individual characteristics, and the regional milieu: Lessons for entrepreneurship support policies from German micro data," The Annals of Regional Science, Springer, vol. 38(2), pages 219-240, 06.
  15. Michael Fritsch & Oliver Falck, 2003. "New Firm Formation by Industry over Space and Time: A Multi-Level Analysis," Discussion Papers of DIW Berlin 322, DIW Berlin, German Institute for Economic Research.
  16. Klepper, Steven, 2001. "Employee Startups in High-Tech Industries," Industrial and Corporate Change, Oxford University Press, vol. 10(3), pages 639-74, September.
  17. 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.
  18. Catherine Armington & Zoltan Acs, 2002. "The Determinants of Regional Variation in New Firm Formation," Regional Studies, Taylor & Francis Journals, vol. 36(1), pages 33-45.
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