Top

Small Business Economics

Published in:

21-07-2016

Do micro start-ups fuel job creation? Cross-country evidence from the DynEmp Express database

Authors: Chiara Criscuolo, Peter N. Gal, Carlo Menon

Published in: Small Business Economics | Issue 2/2017

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

Exploiting a novel database recently built from national business registers by the OECD with the support of an international network of experts, this paper investigates the growth dynamics of micro-firms (employing less than ten workers) across 16 countries. Results show that only a small proportion of micro-firms manage to grow beyond ten employees, but those contribute disproportionately to overall job creation. Econometric analysis focusing in particular on the role of age confirms that young micro-firms—especially those below 3 years of age—are much more likely to grow above ten employees than older firms. These findings are remarkably stable over the three time periods considered (2001–2004, 2004–2007, and 2007–2010), i.e., also during the Great Recession.

previous article Institutional determinants of university spin-off quantity and quality: a longitudinal, multilevel, cross-country study

next article What do firms know? What do they produce? A new look at the relationship between patenting profiles and patterns of product diversification

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Available only for authorised users

Included countries are Austria, Belgium, Brazil, Canada, Finland, France, Hungary, Italy, Japan, Luxembourg, the Netherlands, Norway, New Zealand, Portugal, Sweden and the United Kingdom. As data suppression due to confidentiality restrictions is more binding for the United States, results including at will appear only as a robustness check and for those descriptive charts where the issue does not pose a problem.

See the documentation of the DynEmp v2 routine in Criscuolo et al. (2014b), which also includes as an option the DynEmp Express run.

Confidentiality blanking for US follows more complex criteria that are themselves confidential, and that do not only depend on the number of units contained in the cell.

To answer the question of whether the increased exit rates were productivity enhancing one should look at whether the firms that exited were on average the least productive, and whether average productivity increased after the recession. Recent evidence from the US suggest that the crisis was accompanied by productivity enhancing reallocation; for Europe recent evidence (Andrews et al. 2015) suggests that for Europe this was also the case.

Andrews, D., Bartelsman, E., & Criscuolo C. (2015). Firm dynamics and productivity growth in Europe. In OECD working paper, Forthcoming.

Andrews, D., Criscuolo, C., & Menon, C. (2014). Do resources flow to patenting firms? Cross-country evidence from microdata. In OECD economics department working paper, no. 1127.

Anyadike-Danes, M., Bjuggren, C. M., Gottschalk, S., Hölzl, W., Johansson, D., Maliranta, M., & Grinde Myrann, A. (2013). Accounting for job growth: disentangling size and age effects in an international cohort comparison. In IFN Working paper, no. 1019. Stockholm: Research Institute of Industrial Economics (IFN).

Bartelsman, E., Haltiwanger, J., & Scarpetta S. (2004). Microeconomic evidence of creative destruction in industrial and developing Countries. In The World Bank, policy research working paper series (p. 3464).

Criscuolo, C., Gal, P. N., & Menon, C. (2014a). The dynamics of employment growth: new evidence from 18 Countries, OECD science. In Technology and industry policy papers, no. 14, OECD Publishing.

Criscuolo, C., Gal, P. N., & Menon, C. (2014b). DynEmp: a Stata^® routine for distributed micro-data analysis of business dynamics. In OECD science, technology and industry working papers 2014/2, OECD Publishing.

Davis, S. J., Faberman, R. J., & Haltiwanger, J. (2006). The flow approach to labor markets: new data sources and micro-macro links. Journal of Economic Perspectives, 20(3), 3–26.CrossRef

Davis, S. J., Faberman, R. J., & Haltiwanger, J. (2012). Labor market flows in the cross section and over time. Journal of Monetary Economics. Carnegie-NYU-Rochester conference series on public policy at New York University on April 15–16, 2011, 59(1), 1–18.

Davis, S. J., & Haltiwanger, J. (1992). Gross job creation, gross job destruction, and employment reallocation. The Quarterly Journal of Economics, 107(3), 819–863.CrossRef

Davis, S. J., & Haltiwanger, J. (1999). Gross job flows. In O. Ashenfelter & D. Card (Eds.), Handbook of labor economics (1 ed., Vol. 3, pp. 2711–2805) (chapter 41). Amsterdam, The Netherlands: Elsevier.

Foster, L., Grim, C., & Haltiwanger, J. (2014). Reallocation in the great recession: Cleansing or not? In A. Mas & D. Card (Eds.), The labor market in the aftermath of the great recession. Washington: The National Press Club.

Geurts, K., & Van Biesebroeck, J. (2014). Job creation, firm creation, and de novo entry. In CEPR discussion paper no. DP10118.

Haltiwanger, J., Jarmin, R. S., & Miranda, J. (2013). Who creates jobs? Small versus large versus young. The Review of Economics and Statistics, 95(2), 347–361.CrossRef

Hsieh, C.-T., & Klenow, P. J. (2012). The life cycle of plants in India and Mexico. National Bureau of Economic Research, Working paper no. 18133.

Lawless, M. (2014). Age or size? Determinants of job creation. Small Business Economics, 42(4), 815–830.CrossRef

Ouyang, M. (2009). The scarring effect of recessions. Journal of Monetary Economics, 56(2), 184–199.CrossRef

Schumpeter, J. (1942). Capitalism, socialism, and democracy. New York: Harper & Bros.

Stiglbauer, A., Stahl, F., Winter-Ebmer, R., & Zweimüller, J. 2003. Job creation and job destruction in a regulated labor market: the case of Austria. Empirica, 30(2), 127–148.CrossRef

Title: Do micro start-ups fuel job creation? Cross-country evidence from the DynEmp Express database
Authors: Chiara Criscuolo
Peter N. Gal
Carlo Menon
Publication date: 21-07-2016
Publisher: Springer US
Published in: Small Business Economics / Issue 2/2017
Print ISSN: 0921-898X
Electronic ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-016-9778-x

Springer Professional

Abstract

Please log in to get access to your license.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Wirtschaft"

Other articles of this Issue 2/2017

Ideation, entrepreneurship, and innovation

The impact of public R&D subsidy on small firm productivity: evidence from Korean SMEs

Institutional determinants of university spin-off quantity and quality: a longitudinal, multilevel, cross-country study

The impact of habitual entrepreneurial experience on new firm closure outcomes

ICT as facilitator of internationalisation in small- and medium-sized firms

The private financial gains to entrepreneurship: Is it a good use of public money to encourage individuals to become entrepreneurs?