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ABSTRACT: Motivated by differences in new-firm survival across regions, this paper explores the impact of regional human capital on new-firm survival rates. New-firm survival is interpreted through formation rates of surviving versus closed firms in the service sector. By incorporating knowledge spillovers through a geographical variation model for Labour Market Areas, we empirically test the relationship between regional human capital stocks and new-firm survival. The expected positive relationship between regional human capital and new-firm survival is supported for the period 1993-1995, but is not as strong for the recession period 1990-1992. Controlling for human capital, the new-firm survival rate is negatively related to service sector specialisation and positively related to all-industry intensity, suggesting that city size and diversity may be an important determinant of new-firm survival in both periods. Copyright (c) 2007 the author(s). Journal compilation (c) 2007 RSAI.
Papers in Regional Science. 01/2007; 86(3):367-391.
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ABSTRACT: Motivated by differences in new-firm survival across regions, this paper explores the impact of regional human capital on new-firm survival rates. New-firm survival is interpreted through formation rates of surviving versus closed firms in the service sector. By incorporating knowledge spillovers through a geographical variation model for Labor Market Areas, we empirically test the relationship between regional human capital stocks and new-firm survival. The expected positive relationship between regional human capital and new-firm survival is supported for the period 1993-1995, but is not as strong for the recession period 1990-1992. Controlling for human capital, the new-firm survival rate is negatively related to service sector specialization and positively related to all industry intensity, suggesting that city size and diversity may be an important determinant of new-firm survival in both periods.
01/2007;
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05/2004;
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ABSTRACT: An important new literature on gross employment flows has produced a great outpouring of stylized facts. In this paper we examine one aspect of this literature through the lens of dynamic models and theories of industrial evolution. We extend the Davis and Haltiwanger methodology for analysis of the persistence of gross job creation, distinguishing the persistence of new jobs from business births and from expansions. The persistence rates are then compared with those expected in each sector if average annual job creation and destruction were distributed across the business population independently of the prior year's changes. The results provide a basis for discussing aspects of the different dynamics of job creation in services and manufacturing. Download Info
Journal of Evolutionary Economics 02/2004; · 1.00 Impact Factor
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ABSTRACT: Acs Z. J. and Armington C. (2004) Employment growth and entrepreneurial activity in cities, Regional Studies38, 911-927. Recent theories of economic growth have stressed the role of externalities in generating growth. Using data from the Census Bureau that tracks all employers in the whole US private-sector economy, the impact of these externalities, as measured by entrepreneurial activity, on employment growth in Local Market Areas are examined. Differences in levels of entrepreneurial activity, diversity among geographically proximate industries and the extent of human capital are positively associated with variation in growth rates, but the manufacturing sector appears to be an exception. Acs Z. J. et Armington C. (2004) La croissance de l'emploi et l'esprit d'entreprise dans les grandes villes, Regional Studies38, 911-927. Des theories recentes de la croissance economique ont souligne l'importance des effets externes. A partir des donnees provenant du Census Bureau, institut national de la statistique qui fait le suivi de tous les employeurs dans toute l'economie privee aux Etats-Unis, cet article cherche a examiner les retombees de ces effets externes-la, mesures en termes de l'esprit d'entreprise, sur la croissance de l'emploi dans les bassins d'emplois locaux. Il s'avere que les ecarts des les niveaux de l'esprit d'entreprise, la diversite des industries a proximite, et l'importance du capital humain sont en correlation etroite avec la variation des taux de croissance, a une exception pres, le secteur industriel. Acs Z. J. und Armington C. (2004) Zunahme der Arbeitsstellen und Unternehmertatigkeit in Stadten, Regional Studies38, 911-927. Kurzlich aufgekommene Theorien wirtschaftlichen Wachstums haben die Rolle externer Effekte bei der Wachstumsentwicklung betont. Mit Hilfe von Daten des Census Bureaus, das samtliche Arbeitgeber des Privatsektors der Wirtschaft der USA erfasst, wird die Auswirkung dieser externen Effekte auf die Zunahme von Erwerbsstellen in 'Local Market Areas' durch Messung an Hand unternehmerischer Aktivitat untersucht. Es wird festgestellt, dass Unterschiede der Stufen unternehmerischer Aktivitat, Vielfalt in geographisch benachbarten Industrien und der Umfang des Menschenkapitals in positiver Verbindung mit Abweichungen bei Zuwachsraten auftreten, obschon der herstellende Sektor hierbei eine Ausnahme darstellt. Acs Z. J. y Armington C. (2004) Crecimiento en el empleo y actividad emprendedora en las ciudades, Regional Studies38, 911-927. Las teorias recientes sobre el crecimiento economico han enfatizado el rol de las externalidades en la generacion de crecimiento. Utilizando datos de la Oficina del Censo que siguen la trayectoria de todos los empresarios en la totalidad de la economia del sector privado en los Estados Unidos, examinamos el impacto de estas externalidades, medido por medio del grado de actividad emprendedora, en el crecimiento del empleo en Areas de Mercado Local. Encontramos que las diferencias en los niveles de actividad empresarial, la diversidad entre industrias que estAn geogrAficamente proximas, y el grado de capital humano estAn positivamente asociados a una variacion en los indices de crecimiento, pero el sector manufacturero parece presentar una excepcion.
Regional Studies. 02/2004; 38(8):911-927.
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ABSTRACT: The primary aim of the paper is to place current methodological discussions in macroeconometric modeling contrasting the ‘theory first’ versus the ‘data first’ perspectives in the context of a broader methodological framework with a view to constructively appraise them. In particular, the paper focuses on Colander’s argument in his paper “Economists, Incentives, Judgement, and the European CVAR Approach to Macroeconometrics” contrasting two different perspectives in Europe and the US that are currently dominating empirical macroeconometric modeling and delves deeper into their methodological/philosophical underpinnings. It is argued that the key to establishing a constructive dialogue between them is provided by a better understanding of the role of data in modern statistical inference, and how that relates to the centuries old issue of the realisticness of economic theories.
Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group, Papers on Entrepreneurship, Growth and Public Policy. 01/2004;
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ABSTRACT: The role of education and human capital externalities is a key variable in theories of economic growth. However, the mechanism by which these externalities are realized has not been fully investigated. We examine the relationship between area differences in the levels of human capital and subsequent differences in new firm start-up rates. Firm start-ups are usually based on an innovation (in product, process, or market) that derives from utilization of new knowledge. We find that the new firm start-up rates in areas that function as integrated labor and consumer markets (city plus surrounding commuter area) are (1) positively related to the share of adults with college degrees, and also (2) positively related to higher levels of existing establishments in the same industry and area sector. The finding that higher concentrations of existing establishments in the same industry segment were strongly associated with higher startup rates suggests that spillover of relevant knowledge from other local business owners/managers and researchers within each industry contributes to greater innovation and growth in the area.
03/2003;
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ABSTRACT: Recent theories of economic growth have stressed the role of externalities in generating growth. Using data from the Census Bureau that tracks all employers in the whole U.S. private sector economy, we examine the impact of these externalities, as measured by entrepreneurial activity, on employment growth in Local Market Areas. We find that differences in levels of entrepreneurial activity, diversity among geographically proximate industries, and the extent of human capital are positively associated with variation in growth rates, but the manufacturing sector appears to be an exception.
02/2003;
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ABSTRACT: While much of the literature on new firm formation in the 1980s was motivated by high levels of unemployment, much of the focus on new firm start-ups today is motivated by high technology. Using a new database we examine the role of human capital, training and education, and entrepreneurial environment on new firm formation. We find significant differences in new firm formation rates from industrial regions to technologically progressive regions. Variations in firm birth rates are explained by industrial density, population and income growth. These results are consistent with thick labour markets and localized knowledge spillovers. Alors que le chomage constituait le principal moteur de la documentation sur la creation d'entreprise dans les annees 80, de nos jours c'est plutot la nouvelle technologie qui en est le moteur. A partir d'une nouvelle base de donnees, cet article cherche a examiner le role du capital humain, de la formation et de l'education, et du milieu propice a la creation d'entreprise. Il s'avere d'importants ecarts dans les taux de creation d'entreprise entre les regions industrielles et les regions plus a la pointe de la technologie. La variation du taux de creation d'entreprise s'explique par la densite industrielle, la demographie et la croissance du revenu. Ces resultats-la correspondent aux notions de marches du travail forts et de retombees des connaissances localisees. Wahrend in den achtziger Jahren ein Grossteil der Literatur uber die Grundung neuer Firmen durch den hohen Grad der Erwerbslosigkeit veranlasst worden war, verdankt sie heute das Interesse an Firmengrundungen hauptsachlich der Hochtechnologie. Mit Hilfe einer neuen Datenbank werden die Einflusse von Menschenkapital, Ausbildung und Erziehung und einer unternehmerfreundlichen Umwelt auf Firmengrundungen untersucht. Es werden signifikante Unterschiede in den Raten neuer Firmengrundungen in Industriegebieten und technologisch fortschrittlichen Gebieten festgestellt. Schwankungen in Firmengrundungsraten finden ihre Erklarung in Industriedichte, Bevolkerung und Einkommensanstieg. Diese Ergebnisse stimmen mit starken Arbeitsmarkten und ortlich beschrankter Verbreitung von Kenntnisen uberein.
Regional Studies. 02/2002; 36(1):33-45.
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ABSTRACT: Employment flows in services have greatly exceeded those in manufacturing over the recent decade. We examine these differences and their variation over establishment sizes and types. We test three hypotheses which have been offered to explain these differences: (1) that the difference in behavior of single and multi-unit establishments accounts for much of the difference in the net and gross growth rates of jobs in services and manufacturing; (2) that relative wage differences have a disparate effect on employment growth for services and manufacturing, and (3) that the rates of persistence (or retention) of new jobs are higher in multi-unit establishments than in single unit firms, and similar between the sectors after controlling for this. We find that it is primarily the underlying differences in establishment age and size distributions that account for the substantial differences in the average gross and net job flow rates of the two sectors, and that relative wage differences have a similar effect on employment growth in services and manufacturing.
04/2000;
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ABSTRACT: This paper uses the new Longitudinal Establishment and Enterprise Microdata (LEEM) at CES to investigate gross and net job flows for the U. S. economy. Much of the previous work on U.S. job flows has been based on analysis of the Longitudinal Research Database (LRD), which is limited to establishments in the manufacturing sector. The LEEM is the first high-quality, nationwide, comprehensive database for both manufacturing and non-manufacturing that is suitable for measuring annual job flows. We utilize the LEEM data to measure recent gross and net job flows for the entire U. S. economy. We then examine the relationships between firm size, establishment size, and establishment age, and investigate differences resulting from use of two alternative methods for classification of job flows by size of firm and establishment. Cell-based regression analysis is used to help distinguish among the effects of age, firm size, and establishment size on gross and net job flows in existing establishments. We find that gross job flow rates decline with age, and with increasing establishment size when controlling for age differences, whether initial size or mean size classification is utilized. Firm size differences contribute little or nothing additional when establishment size and age are controlled for. However, the relationship of net job growth to business size is very sensitive to the size classification method, even when data and all other methodology are identical. When mean size classification is used, the coefficient on establishment size for net job growth is generally positive, but when initial size is used, this coefficient is negative. These results shed light on some of the apparently conflicting findings in the literature on the relationship between net growth and the size of businesses.
02/1999;
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Center for Economic Studies, U.S. Census Bureau, Working Papers. 01/1999;
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ABSTRACT: This article analyzes the economics of the private equity industry using a novel model and dataset. We obtain data from a large investor in private equity funds, with detailed records on 238 funds raised between 1993 and 2006. We build a model to estimate the expected revenue to managers as a function of their investor contracts, and we test how this estimated revenue varies across the characteristics of our sample funds. Among our sample funds, about two-thirds of expected revenue comes from fixed-revenue components that are not sensitive to performance. We find sharp differences between venture capital (VC) and buyout (BO) funds. BO managers build on their prior experience by increasing the size of their funds faster than VC managers do. This leads to significantly higher revenue per partner and per professional in later BO funds. The results suggest that the BO business is more scalable than the VC business and that past success has a differential impact on the terms of their future funds. The Author 2010. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oxfordjournals.org., Oxford University Press.
Center for Economic Studies, U.S. Census Bureau, Working Papers. 01/1999;
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ABSTRACT: This paper analyses convergence of unemployment rates in Poland at NUTS4 level by testing nonlinear convergence, applying the modified KSS-CHLL for each pair of territorial units. The results suggest that actually the convergence is a rare phenomenon and occurs only in 1916 cases out of potential over 70 000 combinations. This paper inquires what systematic reasons contribute to this phenomenon. There are some circumstances under which unemployment convergence should be more expected than in others. These include sharing a higher level territorial authority, experiencing similar labour market hardship or sharing the same structural characteristics. For each of these three criteria we analyse the frequency of the differential nonstationarity within groups (as evidence of convergence) and across groups (as evidence of "catching up").
Centre for Research into Industry, Enterprise, Finance and the Firm, CRIEFF Discussion Papers. 01/1999;
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ABSTRACT: Business merger and acquisition activity has been brisk in the United States in the recent past. Yet very little information has been available to help researchers understand the effects of this activity on jobs, businesses, and the American economy. This paper takes a first look at examining merger and acquisition activity using the newly available Longitudinal Establishment and Enterprise Microdata (LEEM) file. The analysis focuses on industries, establishments, and employment by employment size of firm. A first-time comparison of establishments that were acquired and survived over the 1990-1994 period with those that survived but were not acquired finds that the acquired establishments experienced more job change and, in the end, more net job loss than the nonacquired establishments. Establishments in small firms that were acquired by new or large firms experienced especially rapid job growth; however; job losses in establishments acquired from large firms more than offset these job gains.
10/1998;
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ABSTRACT: This paper introduces and documents the new Longitudinal Enterprise and Establishment Microdata (LEEM) database, which has been constructed by Census' Economic Planning and Coordination Division under contract to the Office of Advocacy of the U.S. Small Business Administration. The LEEM links three years (1990, 1994, and 1995) of basic data for each private sector establishment with payroll in any of those years, along with data on the firm to which the establishment belongs each year. The LEEM data will facilitate both broader and more detailed analysis of patterns of job creation and destruction in the U.S., as well as research on the structure and dynamics of U.S. businesses. This paper provides documentation of the construction of LEEM data, summary data on most variables in the database, comparisons of the annual data with that of the nearly identical County Business Patterns, and distributions of establishments and their employment by the size of their firms. This is followed by a simple analysis of changes over time in the attributes of surviving establishments, and a brief discussion of turnover (business births and deaths) in the population and gross changes in employment associated with both establishment turnover and with surviving establishments. It concludes with a summary of the strengths and weaknesses of the LEEM.
06/1998;
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ABSTRACT: Although human capital externalities are a key variable in theories of economic growth, there has been little investigation of the mechanism by which these externalities are realized. We examine the relationship between the local levels of human capital and firm formation rates and find that formation rates differ with the share of adults with college degrees, especially for industries that normally require college-educated founders. They also differ strongly with the local concentration of existing establishments in the same sector, especially for industries serving non-local markets, suggesting that an important mechanism is the spillover of relevant knowledge.
Journal of Urban Economics.
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ABSTRACT: Recent theories of economic growth have stressed the role of externalities in generating growth. Using data from the Census Bureau that tracks all employers in the whole U.S. private sector economy, we examine the impact of these externalities, as measured by entrepreneurial activity, on employment growth in Local Market Areas. We find that differences in levels of entrepreneurial activity, diversity among geographically proximate industries, and the extent of human capital are positively associated with variation in growth rates, but the manufacturing sector appears to be an exception.
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ABSTRACT: The spillovers in knowledge among largely college-educated workers were among the key reasons for the impressive degree of economic growth and spread of entrepreneurship in the United States during the 1990s. Prior ‘industrial policies’ in the 1970s and 1980s did not advance growth because these were based on outmoded large manufacturing models. Zoltan Acs and Catherine Armington use a knowledge spillover theory of entrepreneurship to explain new firm formation rates in regional economies during the 1990s period and beyond. The fastest-growing regions are those that have the highest rates of new firm formation, and which are not dominated by large businesses. The authors of this 2006 text also find support for the thesis that knowledge spillovers move across industries and are not confined within a single industry. As a result, they suggest, regional policies to encourage and sustain growth should focus on entrepreneurship among other factors.
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ABSTRACT: Acs Z. J. and Armington C. (2004) Employment growth and entrepreneurial activity in cities, Regional Studies38, 911-927. Recent theories of economic growth have stressed the role of externalities in generating growth. Using data from the Census Bureau that tracks all employers in the whole US private-sector economy, the impact of these externalities, as measured by entrepreneurial activity, on employment growth in Local Market Areas are examined. Differences in levels of entrepreneurial activity, diversity among geographically proximate industries and the extent of human capital are positively associated with variation in growth rates, but the manufacturing sector appears to be an exception. Acs Z. J. et Armington C. (2004) La croissance de l'emploi et l'esprit d'entreprise dans les grandes villes, Regional Studies38, 911-927. Des théories récentes de la croissance économique ont souligné l'importance des effets externes. A partir des données provenant du Census Bureau, institut national de la statistique qui fait le suivi de tous les employeurs dans toute l'économie privée aux Etats-Unis, cet article cherche à examiner les retombées de ces effets externes-là, mesurés en termes de l'esprit d'entreprise, sur la croissance de l'emploi dans les bassins d'emplois locaux. Il s'avère que les écarts des les niveaux de l'esprit d'entreprise, la diversité des industries à proximité, et l'importance du capital humain sont en corrélation étroite avec la variation des taux de croissance, à une exception près, le secteur industriel. Acs Z. J. und Armington C. (2004) Zunahme der Arbeitsstellen und Unternehmertätigkeit in Städten, Regional Studies38, 911-927. Kürzlich aufgekommene Theorien wirtschaftlichen Wachstums haben die Rolle externer Effekte bei der Wachstumsentwicklung betont. Mit Hilfe von Daten des Census Bureaus, das sämtliche Arbeitgeber des Privatsektors der Wirtschaft der USA erfaßt, wird die Auswirkung dieser externen Effekte auf die Zunahme von Erwerbsstellen in 'Local Market Areas' durch Messung an Hand unternehmerischer Aktivität untersucht. Es wird festgestellt, daß Unterschiede der Stufen unternehmerischer Aktivität, Vielfalt in geographisch benachbarten Industrien und der Umfang des Menschenkapitals in positiver Verbindung mit Abweichungen bei Zuwachsraten auftreten, obschon der herstellende Sektor hierbei eine Ausnahme darstellt. Acs Z. J. y Armington C. (2004) Crecimiento en el empleo y actividad emprendedora en las ciudades, Regional Studies38, 911-927. Las teorías recientes sobre el crecimiento económico han enfatizado el rol de las externalidades en la generación de crecimiento. Utilizando datos de la Oficina del Censo que siguen la trayectoria de todos los empresarios en la totalidad de la economía del sector privado en los Estados Unidos, examinamos el impacto de estas externalidades, medido por medio del grado de actividad emprendedora, en el crecimiento del empleo en Áreas de Mercado Local. Encontramos que las diferencias en los niveles de actividad empresarial, la diversidad entre industrias que estÁn geogrÁficamente próximas, y el grado de capital humano estÁn positivamente asociados a una variación en los índices de crecimiento, pero el sector manufacturero parece presentar una excepción.
Regional Studies. 38(8):911-927.
