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New Firm Creation and Failure: A Matching Approach

Author

Listed:
  • Thomas Gries

    (University of Paderborn)

  • Stefan Jungblut

    (University of Paderborn)

  • Wim Naude

    (United Nations University)

Abstract

We propose that the rate of creation and failure of new firm start-ups can be modelled as a search and matching process, as in labor market matching models. Deriving an "entrepreneurial" Beveridge curve, we show that a successful start-up depends on the efficiency with which entrepreneurial ability is matched with business opportunity, and outline a number of possible applications of this matching approach to assist in formalizing the economics of entrepreneurship.

Suggested Citation

  • Thomas Gries & Stefan Jungblut & Wim Naude, 2011. "New Firm Creation and Failure: A Matching Approach," Working Papers CIE 39, Paderborn University, CIE Center for International Economics.
    • Handle: RePEc:pdn:ciepap:39
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    References listed on IDEAS

    as
    1. Deniz Ucbasaran & Paul Westhead & Mike Wright, 2008. "Opportunity Identification and Pursuit: Does an Entrepreneur’s Human Capital Matter?," Small Business Economics, Springer, vol. 30(2), pages 153-173, February.
    2. Thomas Gries & Wim Naudé, 2010. "Entrepreneurship and structural economic transformation," Small Business Economics, Springer, vol. 34(1), pages 13-29, January.
    3. Gries, Thomas & Naudé, Wim, 2011. "Entrepreneurship and human development: A capability approach," Journal of Public Economics, Elsevier, vol. 95(3), pages 216-224.
    4. Mark Casson & Nigel Wadeson, 2007. "The Discovery of Opportunities: Extending the Economic Theory of the Entrepreneur," Small Business Economics, Springer, vol. 28(4), pages 285-300, April.
    5. Guido Buenstorf, 2007. "Creation and Pursuit of Entrepreneurial Opportunities: An Evolutionary Economics Perspective," Small Business Economics, Springer, vol. 28(4), pages 323-337, April.
    6. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, April.
    7. James Fiet & Pankaj Patel, 2008. "Entrepreneurial Discovery as Constrained, Sytematic Search," Small Business Economics, Springer, vol. 30(3), pages 215-229, March.
    8. Daron Acemoglu & Robert Shimer, 2000. "Wage and Technology Dispersion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 585-607.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Entrepreneurship; start-ups; labor market matching;
    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
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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