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The survival half-life of firms and its effect on economic development

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  • James Derbyshire

Abstract

Shane (2009) has suggested that encouraging more people to become entrepreneurs is bad public policy because it is existing firms that bring jobs and productivity growth and not new firms. To test this view this article shifts the perspective onto existing firms and away from start-up by examining firm survivability in the regions and countries of the UK and its relationship with employment and productivity growth. The article provides some evidence to support Shane’s (2009) view that it is existing firms that are important for economic development.

Suggested Citation

  • James Derbyshire, 2013. "The survival half-life of firms and its effect on economic development," Local Economy, London South Bank University, vol. 28(1), pages 114-122, February.
    • Handle: RePEc:sae:loceco:v:28:y:2013:i:1:p:114-122
    DOI: 10.1177/0269094212466024
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    References listed on IDEAS

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    1. Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, vol. 89(2), pages 94-98, May.
    2. Scott Shane, 2009. "Why encouraging more people to become entrepreneurs is bad public policy," Small Business Economics, Springer, vol. 33(2), pages 141-149, August.
    3. Steven J. Davis & John Haltiwanger, 1992. "Gross Job Creation, Gross Job Destruction, and Employment Reallocation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 819-863.
    4. Peter Johnson, 2005. "Targeting Firm Births and Economic Regeneration in a Lagging Region," Small Business Economics, Springer, vol. 24(5), pages 451-464, June.
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