Start-ups and employment dynamics within and across sectors |
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Authors: | Martin Andersson Florian Noseleit |
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Institution: | 1.Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology and J?nk?ping International Business School (JIBS),Stockholm,Sweden;2.School of Economics and Business Administration,Friedrich-Schiller-University Jena,Jena,Germany |
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Abstract: | We use a decade of longitudinal data on start-ups and employment in Swedish regions to analyze the effect of start-ups on
subsequent employment growth. We extend previous analyses by decomposing the effect of start-ups on total employment change
into within- and cross-sector effects. We find that start-ups in a sector influence employment change in the same as well
as in other sectors. The results illustrate that the known S-shaped pattern can be attributed to the different effects of
start-ups in a sector on employment change in the same sector and in others. Start-ups in a sector have a positive impact
on employment change in the same sector. The effects on employment change in other sectors may be negative or positive, and
depend on the sector under consideration. In particular, start-ups in high-end services deviate from manufacturing and low-end
services in that they have significant negative impacts on employment change in other sectors. The findings are consistent
with the idea that start-ups are a vehicle for change in the composition of regional industry. |
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