We formulate a model that explicitly separates two functions in the innovation process: The introduction of new goods and the quality improvement of existing goods. While the latter is performed by the corporate R&D sector, the first is performed by entrepreneurs. We show that in a three sector...

This paper investigates whether a high level of new business formation in a region stimulates employment in that region. The study looks at the lag structure of these effects, using a data set covering a fairly large time span (1982-2002). The indirect supply-side effects of new firm births,...

Germany and the United States face a common challenge in promoting innovation and entrepreneurship to maintain their leadership in global markets, with the economic growth and employment both societies seek. To this end, innovative policies at national and regional level are needed so that...

This paper examines the relationship between firm births and job creation in Great Britain. We use a new data set for 60 British regions, covering the whole of Great Britain, between 1980 and 1998. The relationship between new-firm startups and employment growth has previously been examined...

This paper examines the relationship between business dynamics (entry and exit of firms) and employment growth at the country-industry level. We use a cross-country data set with harmonized data on numbers of entries and exits for a selection of fast-growing and innovative industries in six...

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...