Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries

Niels Bosma (), Erik Stam and Veronique Schutjens
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Veronique Schutjens: Urban and Regional research Centre Utrecht (URU), Utrecht University, Utrecht, The Netherlands

No 2009-003, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Do firm entry and exit improve the competitiveness of regions? If so, is this a universal mechanism or is it contingent on the type of industry or region in which creative destruction takes place? This paper analyses the effect of firm entry and exit on the competitiveness of regions, measured by total factor productivity (TFP) growth. Based on a study across 40 regions in the Netherlands over the period 1988-2002, we find that firm entry is related to productivity growth in services, but not in manufacturing. The positive impact found in services does not necessarily imply that new firms are more efficient than incumbent firms; high degrees of creative destruction may also improve the efficiency of incumbent firms. We also find that the impact of firm dynamics on regional productivity in services is higher in regions exhibiting diverse but related economic activities.

Keywords: firm entry; firm exit; turbulence; regional competitiveness; total factor productivity (search for similar items in EconPapers)
JEL-codes: L10 M13 O18 R11 (search for similar items in EconPapers)
Date: 2009-01-12
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eec, nep-eff, nep-ent, nep-geo, nep-mic, nep-tid and nep-ure
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Creative destruction and regional productivity growth: evidence from the Dutch manufacturing and services industries (2011)
Working Paper: Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2009-003

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