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

Niels Bosma (), Erik Stam and Veronique Schutjens ()

No 813, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Do processes of 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: entrepreneurship; entry & exit; turbulence; creative destruction; regional competitiveness; total factor productivity (search for similar items in EconPapers)
JEL-codes: L10 M13 O18 R11 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2008-08, Revised 2008-08
New Economics Papers: this item is included in nep-bec, nep-com, nep-eff, nep-ent, nep-geo, nep-mic, nep-tid and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://econ.geo.uu.nl/peeg/peeg0813.pdf Version August 2008 (application/pdf)

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 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:0813

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