Pamela Mueller

The Evolution of Regional Entrepreneurship and Growth Regimes

It is hardly disputed that new business formation and self-employment can be important drivers of economic growth (Scarpetta, 2003; Carree and Thurik, 2003). Recent empirical studies (Fritsch and Mueller, 2004; Van Stel and Storey, 2004; Baptista, Escaria and Madrugo, 2005) have clearly shown that the main positive effects of new business formation do not occur immediately when the new ventures are started but become effective only in the longer run. This paper analyzes the development of regional entrepreneurship and its effect on employment growth in West Germany in the 1983–2002 period. First, we investigate the magnitude and persistence of regional entrepreneurship (section 3 and 4). The second part is devoted to the impact of new businesses on regional employment. This analysis is based on a classification of regional growth regimes that are identified according to differences in the effect that entrepreneurship has on regional employment growth (section 5). In investigating transitions between growth regimes we are able to identify a typical life-cycle of regime types that has important implications for a policy that is aiming at stimulating regional development (section 6). We begin with some basic information on the data and on measurement issues (section 2).

Direct and indirect effects of new business formation on regional employment

The impact of new business formation on regional employment has been investigated. The main effects occur after a considerable time lag. Obviously, a large part of the effect is not due to job creation by the newcomers but rather is of indirect nature. This implies that a large part of the debate about job creation by new business so far has been misleading.

How Persistent are Regional Start-Up Rates? An Empirical Analysis

We investigate regional differences in the level and the development of regional new business formation activity. There is a pronounced variance of start-up rates across the regions. The level of regional new firm formation is rather path-dependent resulting in relatively small changes. The main factors determining the level of regional start-ups are innovative activity and entrepreneurship. These factors are also responsible for changes in the level of regional new business formation. The growth of regional demand and regional unemployment do not play a significant role for the change of regional start-up activity. Steering innovation and creating an entrepreneurial atmosphere could be an appropriate starting point for policy measures that try to promote start-ups. Our empirical evidence strongly suggests that such measures may have significant effect only in the long run.

Die Beständigkeit regionaler Gründungsaktivitäten über die Zeit — Welches Potenzial hat die Gründungsförderung?

Dieser Beitrag analysiert regionale Unterschiede des Niveaus von Grundungsaktivitaten und deren Entwicklung. Die regionalen Grundungsraten weisen eine ausgepragte Streuung auf. Dabei ist eine deutliche Pfadabhangigkeit der Grundungsaktivitaten feststellbar, so dass Anderungen relativ gering ausfallen. Die wesentlichen Bestimmungsgrunde fur die Veranderungen der regionalen Grundungsaktivitaten sind Innovation und Entrepreneurship. Daruber hinaus hat auch das Niveau der regionalen Arbeitslosigkeit einen Einfluss. Die Stimulierung von Innovationsaktivitaten und von Entrepreneurship stellen geeignete Ansatzpunkte fur eine Politik dar, die auf eine Steigerung der Grundungsaktivitaten abzielt. Unser empirischer Befund weist allerdings darauf hin, dass ein wesentlicher Effekt solcher Masnahmen erst langerfristig erwartet werden kann.