The state of European entrepreneurship: Trends in quantity and quality in France, Germany, and the UK (2009-2023)

Massimo G. Colombo, Lena Füner, Massimiliano Guerini, Hanna Hottenrott and Daniel Souza

No 25-052, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: This paper replicates and extends the framework of Guzman and Stern (2020) to examine the evolution of entrepreneurial activity in Europe, focusing on France, Germany, and the United Kingdom between 2009 and 2023. Using harmonized national business registry data, we construct measures of both the quantity and quality of entrepreneurship across regions. In particular, we adapt the Entrepreneurial Quality Index (EQI), the Regional Entrepreneurship Cohort Potential Index (RECPI), and the Regional Entrepreneurial Acceleration Index (REAI) to capture the number of new ventures, their ex-ante growth potential, and the extent to which ecosystems translate this potential into realized outcomes. Our findings support the generalizability of this framework in the European context while revealing substantial heterogeneity across countries and regions. Major metropolitan centers such as Paris, London, and Munich combine high rates of entry with high entrepreneurial quality, but smaller knowledge- and research-intensive regions - including Cambridge, Oxford, Bonn, and Heidelberg - also emerge as important hubs. With respect to ecosystem performance, France and the UK initially exceeded expectations but later experienced steady declines, whereas Germany maintained relatively stable performance, with notable overperformance between 2012 and 2016. Moreover, we find a stronger positive correlation between entrepreneurial quantity and quality in Europe, suggesting that ecosystems capable of generating more start-ups are also more likely to produce high-quality firms. This study provides important insights for the comparative analysis of entrepreneurial ecosystems and builds a foundation for designing policies aimed at fostering high-quality, innovation-driven entrepreneurship in Europe.

Keywords: Entrepreneurial Quality; Entrepreneurial Ecosystem; High-Growth Firms; Regional Innovation (search for similar items in EconPapers)
JEL-codes: G24 G32 L25 L26 M13 R12 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-cse, nep-eec, nep-ent, nep-eur, nep-ino, nep-mac, nep-sbm, nep-tid and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:330316

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