Does Quality make a Difference? Employment Effects of High- and Low-Quality Start-ups

Michael Fritsch (m.fritsch@uni-jena.de) and Alexandra Schroeter

ERSA conference papers from European Regional Science Association

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 to 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 to other industries. We also find a relatively strong overall effect of new business formation in knowledge-intensive service industries. The impact of start-ups in innovative manufacturing industries on overall regional employment growth is, however, not statistically significant what may be mainly a result of their rather small share in all start-ups and due to the fact that they impact more on firms in other regions than start-ups in non-innovative manufacturing. Finally, we discuss conclusions for entrepreneurship policy, which can be derived from our findings.

Date: 2011-09
New Economics Papers: this item is included in nep-cse, nep-ent and nep-sbm
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Citations: View citations in EconPapers (4)

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https://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper1400.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:wiw:wiwrsa:ersa10p1400

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