IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa05p706.html
   My bibliography  Save this paper

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

Author

Listed:
  • Michael Fritsch
  • Pamela Mueller

Abstract

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.

Suggested Citation

  • Michael Fritsch & Pamela Mueller, 2005. "The Persistence of Regional New Business Formation-Activity over Time – Assessing the Potential of Policy Promotion Programs," ERSA conference papers ersa05p706, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa05p706
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa05/papers/706.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. Michael Fritsch & Oliver Falck, 2007. "New Business Formation by Industry over Space and Time: A Multidimensional Analysis," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 157-172.
    7. 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.
    8. Wagner, Joachim, 2004. "Nascent Entrepreneurs," IZA Discussion Papers 1293, Institute of Labor Economics (IZA).
    9. 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.
    10. Wagner, Joachim, 2004. "Are Young and Small Firms Hothouses for Nascent Entrepreneurs? Evidence from German Micro Data," IZA Discussion Papers 989, Institute of Labor Economics (IZA).
    11. 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.
    12. Adriaan Van Stel & David Storey, 2004. "The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 893-909.
    13. 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.
    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;Western Regional Science Association, vol. 38(2), pages 219-240, June.
    15. Olav Sorenson, 2005. "Social networks and industrial geography," Springer Books, in: Uwe Cantner & Elias Dinopoulos & Robert F. Lanzillotti (ed.), Entrepreneurships, the New Economy and Public Policy, pages 55-69, Springer.
    16. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    17. 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.
    18. André van Stel & Viktor Stunnenberg, 2004. "Linking Business Ownership and Perceived Administrative Complexity: An Empirical Analysis of 18 OECD Countries," Scales Research Reports N200409, EIM Business and Policy Research.
    19. 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.
    20. Anders Lundström & Lois A. Stevenson, 2005. "Entrepreneurship Policy: Theory and Practice," International Studies in Entrepreneurship, Springer, number 978-0-387-24202-6, April.
    21. Arnold C. Cooper & William C. Dunkelberg, 1987. "Entrepreneurial Research: Old Questions, New Answers and Methodological Issues," Entrepreneurship Theory and Practice, , vol. 11(3), pages 11-24, January.
    22. Michael Fritsch & Juergen Schmude (ed.), 2006. "Entrepreneurship in the Region," International Studies in Entrepreneurship, Springer, number 978-0-387-28376-0, April.
    23. Klepper, Steven, 2001. "Employee Startups in High-Tech Industries," Industrial and Corporate Change, Oxford University Press, vol. 10(3), pages 639-674, September.
    Full references (including those not matched with items on IDEAS)

    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 & 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.
    2. Fritsch, Michael, 2013. "New Business Formation and Regional Development: A Survey and Assessment of the Evidence," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 9(3), pages 249-364, February.
    3. Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economic Research Papers 2011-006, Friedrich-Schiller-University Jena.
    4. Michael Fritsch, 2008. "How does new business formation affect regional development? Introduction to the special issue," Small Business Economics, Springer, vol. 30(1), pages 1-14, January.
    5. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    6. Barinova, Vera (Баринова, Вера) & Zemtsov, Stepan (Земцов, Степан) & Tsareva, Yulia (Царева, Юлия), 2018. "Review of Empirical Studies of Factors of Entrepreneurial Activity [Обзор Эмпирических Исследований Факторов Предпринимательской Активности]," Working Papers 031830, Russian Presidential Academy of National Economy and Public Administration.
    7. Stuetzer, Michael & Obschonka, Martin & Audretsch, David B. & Wyrwich, Michael & Rentfrow, Peter J. & Coombes, Mike & Shaw-Taylor, Leigh & Satchell, Max, 2016. "Industry structure, entrepreneurship, and culture: An empirical analysis using historical coalfields," European Economic Review, Elsevier, vol. 86(C), pages 52-72.
    8. Niels Bosma & R. Sternberg & Zoltan Acs, 2008. "The Entrepreneurial Advantage of World Cities," Scales Research Reports H200810, EIM Business and Policy Research.
    9. 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.
    10. Rui Baptista & Miguel Preto, 2011. "New firm formation and employment growth: regional and business dynamics," Small Business Economics, Springer, vol. 36(4), pages 419-442, May.
    11. Fritsch, Michael, 2008. "Die Arbeitsplatzeffekte von Gründungen : ein Überblick über den Stand der Forschung (The employment effects of new businesses : a survey of the current state of research)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(1), pages 55-69.
    12. 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.
    13. Fritsch, Michael, 2008. "Die Arbeitsplatzeffekte von Gründungen : ein Überblick über den Stand der Forschung (The employment effects of new businesses : a survey of the current state of research)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(1), pages 55-69.
    14. 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.
    15. Fritsch, Michael, 2008. "Die Arbeitsplatzeffekte von Gründungen : ein Überblick über den Stand der Forschung (The employment effects of new businesses : a survey of the current state of research)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(1), pages 55-69.
    16. 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.
    17. Schanne, Norbert & Weyh, Antje, 2009. "What makes start-ups out of unemployment different?," IAB-Discussion Paper 200904, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    18. Henry Renski, 2015. "Externalities or Experience? Localization Economies and Start-up Business Survival," Growth and Change, Wiley Blackwell, vol. 46(3), pages 458-480, September.
    19. Carla Daniela Calá & Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2016. "Regional determinants of firm entry in a developing country," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 259-279, June.
    20. Michael Wyrwich, 2012. "Regional Entrepreneurial Heritage in a Socialist and a Postsocialist Economy," Economic Geography, Taylor & Francis Journals, vol. 88(4), pages 423-445, October.

    More about this item

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    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:ersa05p706. See general information about how to correct material in RePEc.

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

    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 hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.