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Journal of Evolutionary Economics

, Volume 17, Issue 3, pp 299–315 | Cite as

The persistence of regional new business formation-activity over time – assessing the potential of policy promotion programs

  • Michael FritschEmail author
  • Pamela Mueller
Regular Article

Abstract

We investigate regional differences in the level and the development of regional new business formation activity. There is a pronounced variance of start-up rates across the regions. The level of regional new business formation is rather path-dependent so that changes are relatively small. The main factors determining the level of regional start-ups are innovation and an entrepreneurial climate. These factors also seem to be responsible for changes in the level of regional new business formation. In addition, unemployment plays a role. Steering innovation and creating an entrepreneurial atmosphere could be an appropriate starting point for policy measures that try to promote start-ups. Our empirical evidence strongly suggests that such measures may have significant effect only in the long run.

Keywords

New businesses Entrepreneurship Growth regimes Time lags 

JEL Classification

M13 O1 O18 R11 

Notes

Acknowledgement

We are indebted to two anonymous referees whose comments and suggestions have been very helpful in improving our argument.

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Copyright information

© Springer-Verlag 2007

Authors and Affiliations

  1. 1.Faculty of Economics and Business AdministrationFriedrich-Schiller-University JenaJenaGermany
  2. 2.Department Entrepreneurship, Growth and Public PolicyMax Planck Institute of EconomicsJenaGermany

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