The measurement of entry rates: Recondiseration and resolution

Abstract

This paper extends the recent analysis of Audretsch and Fritsch on entry rates, and suggests a resolution to the possible policy confusion which they discuss. British data also show very different results for the determinants of entry depending on whether the ‘ecological’ or ‘labour market’ entry rate is used. It is shown that, in addition to the static, size-distribution effect discussed by Audretsch and Fritsch, there are dynamic factors at work which may lead to this result. However, there need be no conflict in policy signals arising from this, because the ‘labour market’ approach can be shown to be a superior measure of entry rates where spatial analysis is undertaken.