The link between firm births and job creation: Is there a Upas Tree effect?

André van Stel and David J. Storey ()

Papers on Entrepreneurship, Growth and Public Policy from Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group

Abstract: This paper examines the relationship between firm births and job creation in Great Britain. We use a new data set for 60 British regions, covering the whole of Great Britain, between 1980 and 1998. The relationship between new-firm startups and employment growth has previously been examined either with no time-lag or with only a short period lag. We find, for GB as a whole, no significant relationship between startups and employment creation in the 1980s, but a negative relationship for the 'low enterprise' area of the North East of England. For the 1990s we find a significant positive relationship for GB as a whole but for Scotland, which focussed policy on startups, a negative relationship. We feel this raises questions over policies designed to raise rates of new firm formation as a strategy for employment creation, particularly in 'low enterprise' areas.

JEL-codes: J23 L10 M13 R11 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2004-06
New Economics Papers: this item is included in nep-ent, nep-geo and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (144)

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Persistent link: https://EconPapers.repec.org/RePEc:esi:egpdis:2004-33

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