Workers’ participation in regional economic change following establishment closure

Lars-Fredrik Andersson (), Therese Danley (), Rikard Eriksson () and Martin Henning ()
Additional contact information
Lars-Fredrik Andersson: Umeå University
Therese Danley: Umeå University
Rikard Eriksson: Umeå University
Martin Henning: University of Gothenburg

Small Business Economics, 2020, vol. 54, issue 2, No 14, 589-604

Abstract: Abstract This article analyses if and when workers affected by economic destruction in the form of establishment closures move to more productive or newly started establishments in the region, become self-employed, leave the region or become displaced. Results from multinominal probit models show that the majority of these workers face destructive employment outcomes from a Schumpeterian point of view compared to a matched sample of workers not subject to a closure. However, we do find indications of a creative destruction as a small, albeit significant, share become employed in young establishments. Different types of human capital influence the likelihood of triggering positive or negative regional outcomes. While higher education significantly decreases the risk for unemployment, high-income earners more often become engaged in creative outcomes. Firm tenure increases the likelihood of becoming employed in younger establishments. There are significant spatial differences where metropolitan regions excel as loci of creative change, whereas smaller and peripheral regions face far less creative outcomes of economic transformation.

Keywords: Creative destruction; Establishment closure; Worker reallocation; Regional transformation (search for similar items in EconPapers)
JEL-codes: J63 L26 R11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1007/s11187-018-0036-2 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:54:y:2020:i:2:d:10.1007_s11187-018-0036-2

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-018-0036-2

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().