Abstract
Does new business formation cause economic growth? Much recent research, initiated by Fritsch and Mueller (2004), has been devoted to this question (for an overview of this literature, see Fritsch 2007). Most studies find that long-run (supply-side) effects of new business formation are more pronounced than the direct short-run effects. Fritsch and Mueller (2004) enumerate four categories of these supply-side effects: securing efficiency, acceleration of structural change, amplified innovation, and greater variety of products. All research on this topic to date has in common that it analyzes the short-run and long-run relationship between new business formation and economic development by means of distributed lag models.
A short version of this chapter is published in Applied Economics Letters (Taylor & Francis) with the title Mayflies and Long-Distance Runners: The Effects of New Business Formation on Industry Growth.
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© 2007 Physica-Verlag Heidelberg
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(2007). The Effects of New Business Formation on Industry Growth. In: Emergence and Survival of New Businesses. Contributions to Management Science. Physica-Verlag HD. https://doi.org/10.1007/978-3-7908-1948-9_2
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DOI: https://doi.org/10.1007/978-3-7908-1948-9_2
Publisher Name: Physica-Verlag HD
Print ISBN: 978-3-7908-1947-2
Online ISBN: 978-3-7908-1948-9
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