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An international cohort comparison of size effects on job growth

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  • Anyadike-Danes, Michael
  • Bjuggren, Carl-Magnus
  • Gottschalk, Sandra
  • Hölzl, Werner
  • Johansson, Dan
  • Maliranta, Mika
  • Myrann, Anja

Abstract

The contribution of different-sized businesses to job creation continues to attract policymakers' attention, however, it has recently been recognized that conclusions about size were confounded with the effect of age. We probe the role of size, controlling for age, by comparing the cohorts of firms born in 1998 over their first decade of life, using variation across half a dozen northern European countries Austria, Finland, Germany, Norway, Sweden, and the UK to pin down size effects. We find that a very small proportion of the smallest firms play a crucial role in accounting for cross-country differences in job growth. A closer analysis reveals that the initial size distribution and survival rates do not seem to explain job growth differences between countries, rather it is a small number of rapidly growing firms that are driving this result.

Suggested Citation

  • Anyadike-Danes, Michael & Bjuggren, Carl-Magnus & Gottschalk, Sandra & Hölzl, Werner & Johansson, Dan & Maliranta, Mika & Myrann, Anja, 2014. "An international cohort comparison of size effects on job growth," ZEW Discussion Papers 14-102, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:14102
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    Cited by:

    1. Giovanni Dosi & Emanuele Pugliese & Pietro Santoleri, 2017. "Growth and survival of the `fitter'? Evidence from US new-born firms," LEM Papers Series 2017/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2018. "Who creates jobs and who creates productivity? Small versus large versus young versus old," Economics Letters, Elsevier, vol. 164(C), pages 50-57.
    3. Mika Maliranta & Satu Nurmi, 2019. "Business owners, employees, and firm performance," Small Business Economics, Springer, vol. 52(1), pages 111-129, January.
    4. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars & Andersson, Fredrik, 2019. "Has the Swedish business sector become more entrepreneurial than the US business sector?," Research Policy, Elsevier, vol. 48(7), pages 1809-1822.
    5. Flavio Calvino & Chiara Criscuolo & Carlo Menon, 2018. "A cross-country analysis of start-up employment dynamics," Industrial and Corporate Change, Oxford University Press, vol. 27(4), pages 677-698.
    6. Habermann, Harald, 2017. "Business takeovers and firm growth: Empirical evidence from a German panel," Working Papers 01/17, Institut für Mittelstandsforschung (IfM) Bonn.
    7. Andersson, Fredrik W. & Johansson, Dan & Karlsson, Johan & Lodefalk, Magnus & Poldahl, Andreas, 2017. "The Characteristics and Performance of Family Firms: Exploiting information on ownership, governance and kinship using total population data," Working Papers 2017:1, Örebro University, School of Business.
    8. Andrew Burke & Marc Cowling, 2020. "The relationship between freelance workforce intensity, business performance and job creation," Small Business Economics, Springer, vol. 55(2), pages 399-413, August.
    9. Michael Anyadike-Danes & Mark Hart, 2018. "All grown up? The fate after 15 years of a quarter of a million UK firms born in 1998," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 45-76, January.
    10. Andrén, Daniela & Mudenda, Lackson Daniel & Pettersson, Nicklas, 2019. "Which firms employ older workers?," Working Papers 2018:14, Örebro University, School of Business.
    11. Fornaro, Paolo & Luomaranta, Henri, 2015. "Small Versus Large Firms Employment Patterns in Finland: a Comparison," MPRA Paper 66979, University Library of Munich, Germany.
    12. Fornaro, Paolo & Luomaranta, Henri, 2016. "Job Creation and the Role of Dependencies," MPRA Paper 71586, University Library of Munich, Germany.
    13. Pietro Santoleri, 2019. "Innovation and job creation in (high-growth) new firms," LEM Papers Series 2019/31, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    14. Alex Coad & Julian S. Frankish & Richard G. Roberts & David J. Storey, 2016. "Predicting new venture survival and growth: Does the fog lift?," Small Business Economics, Springer, vol. 47(1), pages 217-241, June.
    15. Karlsson, Johan, 2018. "Does regional context matter for family firm employment growth?," Journal of Family Business Strategy, Elsevier, vol. 9(4), pages 293-310.
    16. Marc Cowling & Weixi Liu & Ning Zhang, 2018. "Did firm age, experience, and access to finance count? SME performance after the global financial crisis," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 77-100, January.

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    More about this item

    Keywords

    birth cohort; firm age; firm size; firm survival; firm growth; distributed micro-data analysis;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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