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Business Cycles, Unemployment and Entrepreneurial Entry - First Evidence from Germany

Author

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  • Michael Fritsch

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

  • Alexander Kritikos

    (German Institute for Economic Research (DIW Berlin), and University of Potsdam, and IZA (Bonn) and IAB (Nuremberg))

  • Katharina Pijnenburg

    (German Institute for Economic Research (DIW Berlin))

Abstract

We investigate whether people become more willingly self-employed during boom periods or in recessions and to what extent it is the business cycle or the employment status influencing entry rates into entrepreneurship. Our analysis for Germany reveals that start-up activities are positively influenced by unemployment rates and that the cyclical component of real GDP has a negative effect. This implies that new business formation is counter-cyclical. Further disentangling periods of low and high unemployment periods reveals a "low unemployment retard effect".

Suggested Citation

  • Michael Fritsch & Alexander Kritikos & Katharina Pijnenburg, 2013. "Business Cycles, Unemployment and Entrepreneurial Entry - First Evidence from Germany," Jena Economics Research Papers 2013-011, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2013-011
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    References listed on IDEAS

    as
    1. André Stel & Martin Carree & Roy Thurik, 2005. "The Effect of Entrepreneurial Activity on National Economic Growth," Small Business Economics, Springer, vol. 24(3), pages 311-321, February.
    2. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    3. Martin Andersson & Sierdjan Koster, 2011. "Sources of persistence in regional start-up rates--evidence from Sweden," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 179-201, January.
    4. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
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    Cited by:

    1. Konon, Alexander & Fritsch, Michael & Kritikos, Alexander S., 2018. "Business cycles and start-ups across industries: An empirical analysis of German regions," Journal of Business Venturing, Elsevier, vol. 33(6), pages 742-761.
    2. Günterberg, Brigitte & Kay, Rosemarie, 2018. "Existenzgründungen von ausländischen Staatsbürgern: Aktualisierung 2018," Daten und Fakten 20, Institut für Mittelstandsforschung (IfM) Bonn.
    3. Suprinovič, Olga & Schneck, Stefan & Kay, Rosemarie, 2016. "Einmal Unternehmer, immer Unternehmer? Selbstständigkeit im Erwerbsverlauf," IfM-Materialien 248, Institut für Mittelstandsforschung (IfM) Bonn.
    4. Kay, Rosemarie & Kranzusch, Peter & Nielen, Sebastian, 2022. "Auswirkungen der Corona-Pandemie auf das gewerbliche Gründungsgeschehen 2020: Eine regionale Analyse," Daten und Fakten 29, Institut für Mittelstandsforschung (IfM) Bonn.
    5. José Miguel Giner & María Jesús Santa-María & Antonio Fuster, 2017. "High-growth firms: does location matter?," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 75-96, March.
    6. Jaeyeob Jeong & Myeonggil Choi, 2017. "The Expected Job Satisfaction Affecting Entrepreneurial Intention as Career Choice in the Cultural and Artistic Industry," Sustainability, MDPI, vol. 9(10), pages 1-16, September.
    7. Lechman, Ewa & Dominiak, Piotr, 2016. "Entrepreneurship vulnerability to business cycle. A new methodology for identification pro-cyclical and counter-cyclical patterns of entrepreneurial activity," MPRA Paper 68793, University Library of Munich, Germany.
    8. Inmaculada Buendía-Martínez & Agustín Álvarez-Herranz & Mercedes Moreira Menéndez, 2020. "Business Cycle, SSE Policy, and Cooperatives: The Case of Ecuador," Sustainability, MDPI, vol. 12(13), pages 1-20, July.
    9. Kay, Rosemarie & Günterberg, Brigitte, 2019. "Existenzgründungen von Frauen: Aktuelle Entwicklungen," Daten und Fakten 24, Institut für Mittelstandsforschung (IfM) Bonn.
    10. Alexander Konon & Michael Fritsch & Alexander Kritikos, 2017. "Business Cycles and Start-ups across Industries: an Empirical Analysis for Germany," Jena Economics Research Papers 2017-013, Friedrich-Schiller-University Jena.
    11. Kay, Rosemarie & Günterberg, Brigitte, 2015. "Existenzgründungen von ausländischen Staatsbürgern," Daten und Fakten 15, Institut für Mittelstandsforschung (IfM) Bonn.
    12. Mohammadi, H. & Abolhasani, L. & Shahnoushi, N. & Shabanian, F., 2018. "The effects of business cycle indicators on stock market indices of food industry in Iran," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277425, International Association of Agricultural Economists.

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    More about this item

    Keywords

    Self-employment; business cycle; unemployment; start-up;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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