Demography and Innovative Entrepreneurship

Werner Bönte (), Oliver Falck and Stephan Heblich

No 2007-084, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Demographic change will be one of the major challenges for economic policy in the developed world in the next decades. In this article, we analyze the relationship between age structure and the number of startups. We argue that an individual's decision to start a business is determined by his or her age and, therefore, that a change in a region's age distribution affects the expected number of startups in the region. Using German regional data, we estimate a count-data model and find that the expected number of startups is positively influenced by the fraction of individuals of working age? 20-64 years old. A more detailed analysis of the working-age distribution suggests that startups in knowledge-based (high-tech) manufacturing industries are affected by changes in this distribution whereas firms in other industries are not. In particular, increases in the fraction of individuals in the 20-30 age range and individuals in the 40-50 age range have a positive effect on the number of high-tech startups.

Keywords: Demography; Age Distribution; Entrepreneurship; Innovation; Region (search for similar items in EconPapers)
JEL-codes: J1 L26 O3 R11 (search for similar items in EconPapers)
Date: 2007-11-12
New Economics Papers: this item is included in nep-age, nep-bec, nep-ent, nep-ino and nep-knm
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Citations: View citations in EconPapers (13)

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Working Paper: Demography and Innovative Entrepreneurship (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2007-084

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