The creation of new firms and jobs in Europe

DAAAM International Scientific Book, 2014

The interest in entrepreneurship and new firm formation has a long tradition in economic history. While dynamic relationship between entry and exit plays a crucial role in economic development, this interrelationship at the same time results in job creation by entering firms and job destruction by exiting firms. Understanding this interrelationship is fundamental in creating stimulating economic policy, although it takes time before the effect of new firm influences economic growth and boosts self-employment and employment overall. Survival of the firms plays important role in preserving jobs and economic growth, the key issues both in economic research and policy making. Therefore, the aim of this paper is to explore business dynamics through entry and exit processes and firm survival in European Post-transition economies. Most of the analysed countries were hit by economic crisis in the observed period and hence, the results should be interpreted in that context as well.

2000

Firm formation activities and their impacts on employment, competition, structural change and technology have become a major focus of regional economic policy over the last 20 years. Yet the analysis of the effects of firm formation and its different dimensions has suffered from incomplete data and insufficient report systems concentrating on but a few characteristics of newly founded firms. A new firm formation module has been designed within the framework of a Regional Economy Policy Information System (WIBIS) in order to overcome the lack of quantitative data on business start-ups and their growth and development characteristics. The module provides continuous annual figures on new firms utilising existing socialinsurance-based data on a national and regional scale. The system allows for the monitoring of different aspects of firm formation activities: Balance of new firms and firm closures, survival rates, gross and net employment effects of firm formation activities, estimation of quality of jobs created (after 3 years). The figures can be broken down by sector (NACE) so e.g. technology intensive sectors can be distinguished from others and also by region so spatial disparities can be monitored. The paper will present the results of a recent new firms monitoring study based on WIBIS. To give an example the study has yielded that 64% of the firms have survived the first 3 years. It allows for some tentative explorations to the contribution of new firms to structural change and gives first quantitative answers to the technology orientation, employment qualification and growth prospects of newly founded firms.

Entrepreneurship and Sustainability Issues

The aim of presented paper is to provide interpretation of available statistical data on entrepreneurship processes in European countries. The author seeks to find answer the question if new business development processes are active and successful what consistent patterns (if any) could be traced. Success factors, such as education and age of entrepreneurs, which launched start-ups in European countries are taken in to accounts. Obtained results, it is believed, would contribute for understanding entrepreneurship phenomena in differently developed countries and, respectively, for finding ways how more efficiently to foster inception of successful and sustainable ventures in the nearest future.

In this paper, we argue why, in our view, the so-called dynamic classification method should be favored when determining the contribution of small businesses towards job creation. First, it is the only method that consistently attributes job creation or loss to the size class in which it actually occurs. In addition, dynamic classification has two other advantages: (1) it is not vulnerable to the so-called regression to the mean bias, and (2) only a small number of aggregated data are required for its application. Using the dynamic classification , we analyze job creation within the different size classes for the 27 Member States of the European Union. Our main findings are as follows. For the EU as a whole, smaller firms contribute on a larger scale towards job creation than do larger firms. Net job creation rates decrease with each firm size class. This pattern occurs in most industries, however, not in all; the manufacturing industry and trade industry show different patterns. At the level of individual countries, the net job creation rate also tends to decrease with each firm size class. However, this relationship is not perfect.

Small Business Economics, 2006

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.

RePEc: Research Papers in Economics, 2017

The aim of this contribution is to establish a typology of European entrepreneurship countries with respect to variables related to entrepreneurial activity and economic development. Using a combined use of multidimensional data analyses allows to extend the concept of "entrepreneurial regimes" proposed by Audretsch and Fritsch (2002) and leads to distinguish five entrepreneurial regimes. Moreover, in order to better characterize classes, a wide set of illustrative variables representative of national economic development, labour market functioning, formal and unformal institutional environment as well as variables specific to the entrepreneurial population are considered. Finally, discriminant analyzes show that the five explanatory themes that are considered (Innovation, Employment, Formal Institutions, Entrepreneurship and Governance) differentiate the classes and significantly explain the diversity of entrepreneurial regimes. These findings have important implications for the implementation of public policy in order to promote entrepreneurial activity and reduce unemployment. Résumé : L'objectif de cette contribution est d'établir une typologie de l'entrepreneuriat dans les pays européens en ce qui concerne les variables liées à l'activité entrepreneuriale et au développement économique. L'utilisation d'analyses combinées de données multidimensionnelles (ACP et CHA) permet d'étendre le concept de «régimes entrepreneuriaux» proposés par Audretsch et Fritsch (2002) et conduit à distinguer cinq régimes entrepreneuriaux. De plus, afin de mieux caractériser les classes, on considère un large éventail de variables illustratives représentatives du développement économique national, du fonctionnement du marché du travail, de l'environnement institutionnel formel et informel ainsi que de variables spécifiques à la population des nouvelles entreprises. Enfin, les analyses discriminantes montrent que les cinq thèmes explicatifs considérés (Innovation, Emploi, Institutions formelles, Entrepreneuriat et Gouvernance) différencient les classes et expliquent de manière significative la diversité des régimes entrepreneuriaux. Ces résultats ont des implications importantes pour la mise en oeuvre de la politique publique afin de promouvoir l'activité entrepreneuriale et de réduire le chômage.

SSRN Electronic Journal, 2000

Despite the relevance in terms of policy, we still know little in Spain about where and by whom jobs are created, and how that is affecting the size distribution of firms. The main innovation of this paper is to use a rich database that overcomes the problems encountered by other firm-level studies to shed some light on the employment generation of small firms in Spain. We find that small firms contribute to employment disproportionately across all sectors of the economy although the difference between their employment and job creation share is largest in the manufacturing sector. The job creators in that sector are both new and established firms whereas only new small firms outperform their larger counterparts in the service sector. The large annual job creation of the small firm size class is shifting the firm size distribution towards the very small production units, although not uniformly across industries of different technology intensity.

Research Policy, 1998

This paper introduces a simple framework through which the evolution of industries can be 'mapped'. This framework is used to discuss the role of small firms in the development of Europe's high technology sectors during the 1980s. The Ž. framework assesses the development of high technology sectors in two dimensions 1 through the change over time in the Ž. Ž. number of units establishments or enterprises in these sectors and 2 through the changing employment of these sectors. Changes within both manufacturing and service sectors are discussed and differences are found between the sectors examined. Especially among the manufacturing sectors, differences are also found between countries. In some countries the high technology manufacturing sectors are growing both in terms of the number of units active in these activities and their employment, while in other countries, the number of units is increasing but employment is contracting. Within this context, it may well be that the growth in the number of high technology small firms has at least as much to do with 'negative' factors, such as the 'down-sizing' of large firms, as it has to do with 'positive' factors, such as the creation of innovative new enterprises. q 1998 Elsevier Science B.V.

2017

The aim of this contribution is to establish a typology of European entrepreneurship countries with respect to variables related to entrepreneurial activity and economic development. Using a combined use of multidimensional data analyses allows to extend the concept of "entrepreneurial regimes" proposed by Audretsch and Fritsch (2002) and leads to distinguish five entrepreneurial regimes. Moreover, in order to better characterize classes, a wide set of illustrative variables representative of national economic development, labour market functioning, formal and unformal institutional environment as well as variables specific to the entrepreneurial population are considered. Finally, discriminant analyzes show that the five explanatory themes that are considered (Innovation, Employment, Formal Institutions, Entrepreneurship and Governance) differentiate the classes and significantly explain the diversity of entrepreneurial regimes. These findings have important implications for the implementation of public policy in order to promote entrepreneurial activity and reduce unemployment. Résumé : L'objectif de cette contribution est d'établir une typologie de l'entrepreneuriat dans les pays européens en ce qui concerne les variables liées à l'activité entrepreneuriale et au développement économique. L'utilisation d'analyses combinées de données multidimensionnelles (ACP et CHA) permet d'étendre le concept de «régimes entrepreneuriaux» proposés par Audretsch et Fritsch (2002) et conduit à distinguer cinq régimes entrepreneuriaux. De plus, afin de mieux caractériser les classes, on considère un large éventail de variables illustratives représentatives du développement économique national, du fonctionnement du marché du travail, de l'environnement institutionnel formel et informel ainsi que de variables spécifiques à la population des nouvelles entreprises. Enfin, les analyses discriminantes montrent que les cinq thèmes explicatifs considérés (Innovation, Emploi, Institutions formelles, Entrepreneuriat et Gouvernance) différencient les classes et expliquent de manière significative la diversité des régimes entrepreneuriaux. Ces résultats ont des implications importantes pour la mise en oeuvre de la politique publique afin de promouvoir l'activité entrepreneuriale et de réduire le chômage.