Empirica

, Volume 21, Issue 1, pp 105–113

On the measurement of entry rates

  • David B. Audretsch
  • Michael Fritsch
Article

Abstract

The purpose of this paper is to explicitly examine the impact that two distinct methods used to measure entry have on identifying the determinants of entry. The two approaches can be termed as the ecological approach and the labor market approach. Based on new business startups in 75 regional markets in West Germany, we find that the two different methods for measuring entry yield disparate results. Most strikingly, we find that the ecological approach yields a positive relationship between unemployment and startup activity, while the labor market approach points to a negative impact of unemployment on the startup of new firms. By decomposing these two measures we offer a reconciliation of what appears to be a measurement contradiction.

Key words

Entry Germany regions new firm startups 

JEL codes

L0 L1 

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Copyright information

© Kluwer Academic Publishers 1994

Authors and Affiliations

  • David B. Audretsch
    • 1
  • Michael Fritsch
    • 2
  1. 1.Wissenschaftszentrum für SozialforschungBerlinGermany
  2. 2.Bergakademie FreibergSachsenGermany

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