 Why Does the Effect of New Business Formation Differ Across Regions?Michael Fritsch () and Alexandra Schroeter No 2007-077, Jena Economics Research Papers from Friedrich-Schiller-University Jena Abstract: We investigate regional differences of the effect of new business formation on employment growth in West Germany. We find an inverse ‘u’-shaped relationship between the level of start-up activity and employment change. The main variables that shape the employment effects of new businesses in a region are population density, the share of medium level skilled workers, the proportion of Research and Development conducted in small businesses (entrepreneurial technological regime), the unemployment rate as well as the degree of specialization of the regional economy. However, indicators for education and innovation activity in the region proved not to be statistically significant. Conducting our analysis for manufacturing and services separately confirmed the pattern of our previous results only for manufacturing but not for services. Keywords: Entrepreneurship; new business formation; regional development; entrepreneurship policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2007-077 Access Statistics for this paper More papers in Jena Economics Research Papers from Friedrich-Schiller-University Jena |
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