Audretsch and Fritsch (2002) proposed two explanations for the mixed evidence regarding the relationship between new firm formation and regional development. Firstly, they found evidence for the existence of long time lags needed before the main effects of new firm formation on employment change...

In our era of "shareholder value", news of redundancies in leading global companies is good news for the stock market. The coincidence of this kind of news with growing unemployment creates the impression of a direct and simple relationship between the two developments. In this paper, we use...