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Accounting for Job Growth: Disentangling Size and Age Effects in an International Cohort Comparison

Michael Anyadike-Danes (), Carl Magnus Bjuggren (), Sandra Gottschalk (), Werner Hölzl (), Dan Johansson (), Mika Maliranta () and Anja Myrann ()
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Michael Anyadike-Danes: Aston Business School
Sandra Gottschalk: The Centre for European Economic Research (ZEW) in Mannheim
Mika Maliranta: The Research Institute of the Finnish Economy (ETLA)
Anja Myrann: Ragnar Frisch Centre for Economic Research, Norway

No 2, Research Papers from Enterprise Research Centre

Abstract: The contribution of different-sized businesses to job creation continues to attract policymakers’ attention, however, it has recently been recognized that conclusions about size were confounded with the effect of age. We probe the role of size, controlling for age, by comparing the cohorts of firms born in 1998 over their first decade of life, using variation across half a dozen northern European countries Austria, Finland, Germany, Norway, Sweden, and the UK to pin down size effects. We find that a very small proportion of the smallest firms play a crucial role in accounting for cross-country differences in job growth. A closer analysis reveals that the initial size distribution and survival rates do not seem to explain job growth differences between countries, rather it is a small number of rapidly growing firms that are driving this result.

Keywords: birth cohort; firm age; firm size; firm survival; firm growth (search for similar items in EconPapers)
JEL-codes: L25 E24 M13 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2013-05-02
New Economics Papers: this item is included in nep-bec, nep-ent, nep-mac and nep-sbm
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