Abstract
This article analyzes the relationship between regional start-up activities and employment change in subsequent years for the West German planning regions. I find that the number of start-ups in a particular region is determined to a high degree by the prevalent sectoral structure. To eliminate this influence sectorially adjusted new-firm formation rates are calculated. These rates reflect a clear core-to-periphery decline. The relationship between the level of regional start-up activities and employment change comes out to be rather weak. In contrast to the common wisdom the coefficients for the impact of the entry rate on regional employment indicates a negative contribution of regional start-up acitivities.
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Fritsch, M. New Firms and Regional Employment Change. Small Business Economics 9, 437–448 (1997). https://doi.org/10.1023/A:1007942918390
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DOI: https://doi.org/10.1023/A:1007942918390