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The Shifting Source of New Business Establishments and New Jobs

Author

Listed:
  • Ian Hathaway
  • Mark E. Schweitzer
  • Scott Shane

Abstract

As markets and business patterns change, new business establishments are created to serve them. Those new establishments can be provided by entrepreneurs creating new firms or by the owners of existing businesses opening new locations. We show that over the past three decades, new establishments have increasingly been provided by existing businesses opening new locations. Those new locations have created jobs at a higher rate than brand-new firms, which helps to boost job creation. Looking at both forms of new establishments shows that job creation is down following the recession, but new locations were growing entering the recession and should be a critical component of job creation as the economy continues to recover.

Suggested Citation

  • Ian Hathaway & Mark E. Schweitzer & Scott Shane, 2014. "The Shifting Source of New Business Establishments and New Jobs," Economic Commentary, Federal Reserve Bank of Cleveland, issue Aug.
    • Handle: RePEc:fip:fedcec:00020
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    References listed on IDEAS

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