IDEAS home Printed from https://ideas.repec.org/p/zbw/tuddps/0208.html
   My bibliography  Save this paper

The determinants of job creation and destruction: plant-level evidence for Eastern and Western Germany

Author

Listed:
  • Fuchs, Michaela
  • Weyh, Antje

Abstract

We examine job creation and destruction in Eastern and Western Germany for the period of 1999 to 2004, using a large dataset, which enables us to capture clearly entries and exits. There are pronounced differences between the two parts of Germany in terms of magnitude and composition of gross job flows. Considering interaction effects between all variables, weighted regressions show that job creation and destruction can be explained to a large part by plant-specific factors. The pattern found to be pervasive in descriptive studies for other countries that job reallocation rates diminish with firm size and firm age also holds true for Germany. Given that East German plants are smaller and younger than their West German counterparts, this finding largely explains the differences between the East and West German labour dynamics.

Suggested Citation

  • Fuchs, Michaela & Weyh, Antje, 2008. "The determinants of job creation and destruction: plant-level evidence for Eastern and Western Germany," Dresden Discussion Paper Series in Economics 02/08, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    • Handle: RePEc:zbw:tuddps:0208
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/36495/1/590235885.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Broersma, Lourens & Gautier, Pieter, 1997. "Job Creation and Job Destruction by Small Firms: An Empirical Investigation for the Dutch Manufacturing Sector," Small Business Economics, Springer, vol. 9(3), pages 211-224, June.
    2. Michael Berlemann & Marcel Thum, 2005. "Blooming landscapes in East Germany?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(04), pages 16-22, December.
    3. Michael Berlemann & Marcel Thum, 2006. "Mittelfristige Perspektiven der Ost-West-Konvergenz," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(01), pages 34-39, 02.
    4. Alfred Stiglbauer & Florian Stahl & Rudolf Winter-Ebmer & Josef Zweimüller, 2003. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(2), pages 127-148, June.
    5. P. A. Geroski & José Mata & Pedro Portugal, 2010. "Founding conditions and the survival of new firms," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 510-529, May.
    6. Boeri, Tito & Cramer, Ulrich, 1992. "Employment growth, incumbents and entrants : Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 10(4), pages 545-565, December.
    7. Baldwin, John & Picot, Garnett, 1995. "Employment Generation by Small Producers in the Canadian Manufacturing Sector," Small Business Economics, Springer, vol. 7(4), pages 317-331, August.
    8. Contini, Bruno & Revelli, Riccardo, 1997. "Gross flows vs. net flows in the labor market: What is there to be learned?," Labour Economics, Elsevier, vol. 4(3), pages 245-263, September.
    9. Blanchard, Olivier Jean & Diamond, Peter, 1992. "The Flow Approach to Labor Markets," American Economic Review, American Economic Association, vol. 82(2), pages 354-359, May.
    10. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805, Elsevier.
    11. Gomez-Salvador, Ramon & Messina, Julian & Vallanti, Giovanna, 2004. "Gross job flows and institutions in Europe," Labour Economics, Elsevier, vol. 11(4), pages 469-485, August.
    12. Michael Fritsch & Antje Weyh, 2006. "How Large are the Direct Employment Effects of New Businesses? An Empirical Investigation for West Germany," Small Business Economics, Springer, vol. 27(2), pages 245-260, October.
    13. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
    14. Davidsson, Per & Lindmark, Leif & Olofsson, Christer, 1998. "The Extent of Overestimation of Small Firm Job Creation--An Empirical Examination of the Regression Bias," Small Business Economics, Springer, vol. 11(1), pages 87-100, August.
    15. Michael Berlemann & Marcel Thum, 2006. "Mittelfristige Perspektiven der Ost-West-Konvergenz," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(01), pages .34-39, February.
    16. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    17. John Baldwin & Timothy Dunne & John Haltiwanger, 1998. "A Comparison Of Job Creation And Job Destruction In Canada And The United States," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 347-356, August.
    18. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
    19. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    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. Martin-Barroso, David & Nuñez-Serrano, Juan Andres & Turrion, Jaime & Velazquez, Francisco J., 2011. "The European Map of Job Flows," MPRA Paper 33602, University Library of Munich, Germany, revised 2011.
    2. Julián Messina & Giovanna Vallanti, 2007. "Job Flow Dynamics and Firing Restrictions: Evidence from Europe," Economic Journal, Royal Economic Society, vol. 117(521), pages 279-301, June.
    3. Böheim, René & Stiglbauer, Alfred & Winter-Ebmer, Rudolf, 2009. "On the persistence of job creation in old and new firms," Economics Letters, Elsevier, vol. 105(1), pages 17-19, October.
    4. Gomez-Salvador, Ramon & Messina, Julian & Vallanti, Giovanna, 2004. "Gross job flows and institutions in Europe," Labour Economics, Elsevier, vol. 11(4), pages 469-485, August.
    5. Catherine Armington & Alicia Robb & Zoltan J Acs, 1999. "Measures Of Job Flow Dynamics In The U.S.," Working Papers 99-1, Center for Economic Studies, U.S. Census Bureau.
    6. Gartell, Marie & Jans, Ann-Christin & Persson, Helena, 2010. "The importance of education for the reallocation of labor: Evidence from Swedish linked employer-employee data 1986-2002," Labour Economics, Elsevier, vol. 17(1), pages 206-214, January.
    7. Luz A. Flórez & Leonardo Fabio Morales & Daniel Medina & José Lobo, 2021. "Labor flows across firm size, age, and economic sector in Colombia vs. the United States," Small Business Economics, Springer, vol. 57(3), pages 1569-1600, October.
    8. Gielen, Anne C. & van Ours, Jan C., 2006. "Age-specific cyclical effects in job reallocation and labor mobility," Labour Economics, Elsevier, vol. 13(4), pages 493-504, August.
    9. David Neumark & Junfu Zhang & Brandon Wall, 2007. "Employment Dynamics and Business Relocation: New Evidence from the National Establishment Time Series," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 39-83, Emerald Group Publishing Limited.
    10. Bhaskar Jyoti Neog & Bimal Kishore Sahoo, 2020. "Job Reallocation Dynamics in India: Evidence from Large Manufacturing Plants," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(4), pages 934-959, August.
    11. Faggio, Giulia & Konings, Jozef, 2003. "Job creation, job destruction and employment growth in transition countries in the 90s," Economic Systems, Elsevier, vol. 27(2), pages 129-154, June.
    12. repec:eee:labchp:v:3:y:1999:i:pb:p:2711-2805 is not listed on IDEAS
    13. Ligia Alba Melo & Carlos Andrés Ballesteros, 2013. "Creación, destrucción y reasignación del empleo en el sector manufacturero colombiano," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 15(28), pages 281-311, January-J.
    14. Harald Dale-Olsen & Dag Rønningen, 2000. "The Importance of Definitions of Data and Observation Frequen-cies for Job and Worker Flows - Norwegian Experiences 1996-1997," Discussion Papers 278, Statistics Norway, Research Department.
    15. Pierrette Heuse & Yves Saks, 2009. "Labour flows in Belgium," Working Paper Research 162, National Bank of Belgium.
    16. Jasper Hoek, 2002. "Labor Market Institutions and Restructuring: Evidence from Regulated and Unregulated Labor Markets in Brazil," William Davidson Institute Working Papers Series 484, William Davidson Institute at the University of Michigan.
    17. Nobuhiro Kiyotaki & Ricardo Lagos, 2007. "A Model of Job and Worker Flows," Journal of Political Economy, University of Chicago Press, vol. 115(5), pages 770-819, October.
    18. J. David Brown & John S. Earle, 2002. "Job Reallocation and Productivity Growth under Alternative Economic Systems and Policies: Evidence from the Soviet Transition," CERT Discussion Papers 0208, Centre for Economic Reform and Transformation, Heriot Watt University.
    19. Steven J. Davis & John Haltiwanger & Ron Jarmin & Javier Miranda, 2007. "Volatility and Dispersion in Business Growth Rates: Publicly Traded versus Privately Held Firms," NBER Chapters, in: NBER Macroeconomics Annual 2006, Volume 21, pages 107-180, National Bureau of Economic Research, Inc.
    20. Jozef Konings & Olga Kupets & Hartmut Lehmann, 2002. "Gross Job Flows in Ukraine: Size, Ownership and Trade Effects," William Davidson Institute Working Papers Series 521, William Davidson Institute at the University of Michigan.
    21. Giovanni Gallipoli & Gianluigi Pelloni, 2013. "Macroeconomic Effects of Job Reallocations: A Survey," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 5(2), pages 127-176, December.

    More about this item

    Keywords

    Job Creation and Destruction; Job Turnover; Employment Growth; Employment-weighted Regression;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    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:zbw:tuddps:0208. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/pltudde.html .

    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.