Firm Creation and Economic Transitions

John E. Jackson, Jacek Klich and Krystyna Poznanska

No 238, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Virtually all industrial countries are experiencing some form of transformation in their economies, from the dramatic move from centrally planned to market economies in East-central Europe, to the rebuilding of the economies in the so-called Rust Belt of the USA, to the efforts by Asian countries to return to their recent high growth levels. The analysis builds on the work of Schumpeter, Hannan and Freeman, and Kornai to develop a picture of an economy as an evolutionary process in which the creation, survival and growth of firms is the key to continued growth. This entrepreneurial activity is vital to successful transformations at critical points when the existing enterprises are not well suited to market conditions - what Schumpeter refers to as creative destruction. This paper uses detailed data on the transitions in the Polish and Michigan economies to present evidence to support these propositions. Showing that the successful transformation of two economies with obvious historical differences both depended upon the creation of new firms rather than on the restructuring of existing firms shows that entrepreneurial activity is a universal necessity.

Pages: pages
Date: 1998-07-01
New Economics Papers: this item is included in nep-ent
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp238.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp238.pdf [302 Found]--> https://wdi.umich.edu/files/Publications/WorkingPapers/wp238.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wdi:papers:1998-238

Access Statistics for this paper

More papers in William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109. Contact information at EDIRC.
Bibliographic data for series maintained by WDI ().