The effects of new firm formation on regional development over time: The case of Great Britain

Pamela Mueller (), 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 re-examines the link between new firm formation and subsequent employment growth. It investigates whether it is possible to have the wrong type of entrepreneurship - defined as new firm formation which leads to zero or even negative subsequent employment growth. It uses a very similar approach to that of Fritsch and Mueller (2004), confirming their findings that the employment impact of new firm formation is in three discrete phases. Then, using data for Great Britain, the paper shows the employment impact of new firm formation is significantly positive in England, but zero in Scotland where formation rates are much lower. It also shows that, in the low enterprise counties of GB, new firm formation has a negative effect on employment, implying that we find that the "wrong type of entrepreneurship" is possible.

Keywords: New firm formation; employment growth; Great Britain; low entrepreneurial regions (search for similar items in EconPapers)
JEL-codes: J23 L10 M13 R11 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2006-10
New Economics Papers: this item is included in nep-cse, nep-ent, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: The effects of new firm formation on regional development over time: The case of Great Britain (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:esi:egpdis:2006-24

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