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Direct and indirect effects of new businesses on regional employment - An empirical analysis

Author

Listed:
  • Michael Fritsch

    (Friedrich Schiller University Jena, School of Economics and Business Administration)

  • Florian Noseleit

    (Friedrich Schiller University Jena, School of Economics and Business Administration)

  • Yvonne Schindele

    (Friedrich Schiller University Jena, School of Economics and Business Administration)

Abstract

We analyze different types of effects that new businesses may have on regional employment. We introduce different measures for employment change by separating employment change in incumbent businesses and employment change in new businesses. There are pronounced differences between regions with regard to the different employment effects. The average indirect employment effects of new business formation on incumbent employment are positive and are considerably larger than the employment that is directly generated in the new businesses.

Suggested Citation

  • Michael Fritsch & Florian Noseleit & Yvonne Schindele, 2008. "Direct and indirect effects of new businesses on regional employment - An empirical analysis," Jena Economics Research Papers 2008-074, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2008-074
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    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2008/wp_2008_074.pdf
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    Cited by:

    1. Sierdjan Koster & André Stel & Mickey Folkeringa, 2012. "Start-ups as drivers of market mobility: an analysis at the region–sector level for The Netherlands," Small Business Economics, Springer, vol. 39(3), pages 575-585, October.
    2. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.
    3. Slavtchev, Viktor & Wyrwich, Michael, 2023. "The effects of TV content on entrepreneurship: Evidence from German unification," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 696-721.
    4. Michael Fritsch & Florian Noseleit, 2013. "Indirect employment effects of new business formation across regions: The role of local market conditions," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 361-382, June.
    5. Michael Fritsch & Florian Noseleit, 2013. "Start-ups, long- and short-term survivors, and their contribution to employment growth," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 719-733, September.
    6. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.

    More about this item

    Keywords

    Entrepreneurship; new business formation; regional development; direct and indirect effects;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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