How large are the direct employment effects of new businesses?

Abstract

"We analyze the development of employment in start-up cohorts, which is the direct gross employment effect of the new businesses. The data is for West Germany and covers the 1984-2002 period. While total employment in the cohorts remains above the initial level in manufacturing, we find a pronounced decline of employment below this level in the service sector. Only a small fraction of the firms create a considerable amount of jobs. The contribution that the start-up cohorts of the 1984-2002 period made to total employment in 2002 is nearly three times as high in services as in manufacturing." (Author's abstract, IAB-Doku) ((en))

Cite article

Fritsch, M. & Weyh, A. (2006): How large are the direct employment effects of new businesses? An empirical investigation for West Germany. In: Small Business Economics, Vol. 27, No. 2/3, p. 245-260.