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Firm Entry and Exit in Local Markets: Market Pull and Unemployment Push

Marcus Dejardin () and Martin Carree

No 1114, Working Papers from University of Namur, Department of Economics

Abstract: Firm entry and exit flows in the retailing and consumer services may be viewed as market equilibrating processes. Local markets with considerable market room and high unemployment ought to be characterized by high subsequent entry rates and low exit rates. However, lack of entrepreneurial alertness may inhibit this. We examine the relationship and obtain empirical results for a range of selected industries in 563 Belgian municipalities. We show that, over a three-year period, (net) entry is positively affected by the presence of local 'market room' and also by future market pull. We find 'unemployment push' effect on entry in easy-to-enter industries, but also a significant effect of unemployment on exit.

Keywords: Entrepreneurship; Entry; Exit; Entrepreneurship; Unemployment (search for similar items in EconPapers)
JEL-codes: L80 M13 R12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ent, nep-ind, nep-sbm and nep-ure
Date: 2011-10
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http://www.fundp.ac.be/eco/economie/recherche/wpseries/wp/1114.pdf First version, 2011 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:nam:wpaper:1114

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