Start-ups, long- and short-term survivors, and their contribution to employment growth


Michael Fritsch · Florian Noseleit


Abstract This study documents that the survival of start-ups is central in explaining
the relationship between entry and regional employment growth. Distinguishing
between start-ups according to the period of their survival shows that the positive
effect of new business formation on employment growth is mainly driven by those
new businesses that are strong enough to remain in the market for a certain period
of time. This result is especially pronounced for the relationship between the surviving
start-ups and employment growth in incumbent businesses indicating that
there are significantly positive indirect effects of new business formation on regional
development. We draw conclusions for policy and make suggestions for further
research.


J Evol Econ (2013) 23:719–733