Defining and Tracking Business Start-Ups

2009

Empirical analyses suggest that the employment creating effect of start-ups is highest in regions with a low level of new business formation and that an increase in the regional start-up rate beyond a certain level may lead to negative employment effect. In explaining these results, we assume that the average quality of regional start-ups decreases with the number of start-ups,

Ssrn Electronic Journal, 2014

International Journal of Entrepreneurship and …, 2010

We examine the regional effects of new business formation on subsequent employment growth, observing in particular the effects of different kinds of start-ups on employment change, and the lag structure of these effects. We differentiate new firms according to three criteria: 1) size; 2) presence of foreign capital; 3) incorporation of knowledge/technology. In all cases, results suggest that effects on new firm formation on subsequent employment change are significantly different according to the type of start-up. Start-ups that are larger, foreign-owned, and knowledge-based have considerably stronger effects on industrial re-structuring and employment change, whether due to market selection processes or supply-side spillovers. The results therefore suggest that recognising the types of entrants that generate greater impacts on employment growth is of foremost importance for the design of public policies towards entrepreneurship.

Small Business Economics, 2007

This paper gives an overview of the empirical research on the effects of new business formation on regional development and introduces the contributions to this special issue. The effects of new businesses on regional development emerge over a longer time-period of up to ten years. A main focus of the contributions to this special issue is on the distribution of these effects over time and on the magnitude of the overall effect. While the basic pattern found for the different countries and regions is quite similar, the magnitude of the overall effect can be different and may even be negative. There are strong indications, that the type of entrants plays an important role in this respect.

Small Business Economics, 2011

We give an overview of the contributions to this special issue and identify topics for further research. The contributions collected in this special issue document considerable advancements in the research about the effects of new business formation on regional development. Differences in these effects are found according to types of start-ups and their regional environment. Future research should try to shed more light on such differences. This particularly requires information about the characteristics of startups such as their knowledge intensity as well as their innovativeness and characteristics of their product program. Moreover, future research has to clarify to what extent new business formation is determined by previous or expected growth and to what extent startups have an effect on economic growth independent of an already existent development trend.

Small Business Economics, 2010

This study examines differences in the effects of start-up rates on subsequent employment change. Two sources of such differences—types of start-ups and types of regions—are analyzed. We find that differences between knowledge-based and other start-ups dominate differences between highly agglomerated and modestly agglomerated regions. In particular, differences in the effects of new start-ups on subsequent employment growth between highly agglomerated and modestly agglomerated regions are greater for knowledge-based start-ups than for other types of start-ups. The results suggest that, while knowledge-based start-ups are likely to impart greater benefits on future employment than other types of start-ups, these benefits are greater when those start-ups locate in more agglomerated regions.

Foundations and Trends® in Entrepreneurship, 2013

A Research Agenda for Entrepreneurship and Innovation

This paper reviews the empirical evidence concerning the regional emergence of innovative new businesses. It is argued that analyses using aggregate data that focus on the regional level and do not account for career patterns of innovative founders are of limited value in guiding policy that is aimed at fostering the emergence of innovative new businesses. Progress can be mainly expected from research that investigates the family backgrounds, education, and employment careers of potential founders. Moreover, it would be helpful to develop clearer empirical definitions of what constitutes an innovative new business, and the distinctions between different types of innovative businesses.

Innovation: The European Journal of Social Science Research, 2009

Start-ups of new firms are important for economic growth. However, start-up rates differ significantly between countries and within regions of the same country. A large empirical literature studies the reasons for this and attempts to identify the regional determinants of start-ups. In contrast, there is a much smaller theoretical literature that attempts the formal modelling of the start-up process within a region. In this paper, we attempt to contribute to this small literature by introducing a general theoretical model of the entrepreneurial startup process. The model links start-ups to economic growth and can be applied to understand growth in a regional context. We derive five propositions that fit the stylized facts from the empirical literature: (i) growth in the regional economy is driven by an expansion in the number of start-up firms that supply intermediate goods and services; (ii) improvements in human capital will enhance the rate of start-ups; (iii) improvements in the relative rates of return to entrepreneurs and business conditions will raise start-up rates; (iv) an increase in regional financial concentration will reduce the start-up rate in a region and; (v) increased agglomeration/urbanization in a region has an a priori ambiguous effect on start-up rates.

Journal of Economic Geography, 2008