Does Quality Make a Difference? Employment Effects of High- and Low-Quality Start-Ups

Michael Fritsch () and Alexandra Schroeter ()
Additional contact information
Alexandra Schroeter: School of Economics and Business Administration, Friedrich-Schiller-University Jena, Postal: Carl-Zeiß-Straße 3, 07743 Jena, Germany

No 2011-001, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: This paper investigates the impact of new firms' quality on the magnitude of their employment effects. Our results clearly show that the quality of start-ups, measured by their affiliation with sectors and innovative industries, strongly influences the direct and the overall employment contribution of new firms. In particular, start-ups in manufacturing industries generate larger direct and overall growth effects than those in services. Moreover, new businesses in innovative manufacturing and in knowledge-intensive service industries make a larger direct contribution to employment than start-ups affiliated with other industries. We also find a relatively strong overall effect of new business formation in knowledge-intensive service industries. However, the impact of start-ups in innovative manufacturing industries on overall regional employment growth is not statistically significant, which may be mainly due to their rather small share in all start-ups and because they impact more on firms and employment in other regions than do start-ups in non-innovative manufacturing. Finally, we discuss the implications for entrepreneurship policy that can be derived from our findings.

Keywords: Entrepreneurship; new business formation; innovative industries; regional development; entrepreneurship policy (search for similar items in EconPapers)
JEL-codes: L26 M13 O1 O18 R11 (search for similar items in EconPapers)
Date: 2011-02-15
New Economics Papers: this item is included in nep-cse, nep-ent, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://oweb.b67.uni-jena.de/Papers/jerp2011/wp_2011_001.pdf (application/pdf)

Related works:
Working Paper: Does Quality Make a Difference?: Employment Effects of High- and Low-Quality Start-Ups (2011)
Working Paper: Does Quality make a Difference? Employment Effects of High- and Low-Quality Start-ups (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2011-001

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