Job Creation and the Role of Dependencies

Paolo Fornaro and Henri Luomaranta

MPRA Paper from University Library of Munich, Germany

Abstract: We contribute to the large literature on the relation between firm size and job creation by examining the effects of dependences between enterprises. Using Finnish monthly data encompassing the population of Finnish private businesses, we calculate gross job creation and destruction, together with net job creation, for different size classes and industries. Importantly, we divide firms into a dependent (i.e. owned, at least partially, by a large company) and independent category. The analysis is based on both a dataset including entry and exit and a sample considering only continuous companies, to control for the effects of firm's age. Due to the quality of the data, we are able to isolate the 'organic' growth of firms, disregarding the effects of mergers and split-offs together with other legal restructurings. We find that independent companies have shown considerably higher net job creation, even after taking age into account. However, dependent firms do not show particularly different behavior with respect to the sensitivity to aggregate conditions, compared to their independent counterparts.

Keywords: Dependencies; Job Creation; Firm-level Data; Large datasets; Employment statistics (search for similar items in EconPapers)
JEL-codes: E24 E32 J63 L25 L26 (search for similar items in EconPapers)
Date: 2016-05-01
New Economics Papers: this item is included in nep-bec, nep-ent, nep-eur, nep-mac, nep-net and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Job Creation and the Role of Dependencies (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:71586

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