The Geography of Firm Dynamics: Measuring Business Demography for Regional Development

The Geography of Firm Dynamics: Measuring Business Demography for Regional Development You or your institution have access to this content

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05 Dec 2017
9789264286764 (PDF) ;9789264286726(print)

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The Geography of Firm Dynamics provides methods and data to measure and analyse business demography across OECD regions. It first discusses the methodological challenges of measuring consistently the creation and destruction of businesses at the subnational scale and from an international perspective. Second, it presents a novel database that not only makes such comparison possible but also provides the basis for an analysis of the major trends in business dynamics across regions. The report identifies regional factors that are associated with entrepreneurship and also examines the impact of business creation on regional employment. The Geography of Firm Dynamics provides a tool for national and local policy makers to design strategies for healthier business environments that are tailored to the specific characteristics of each region, thereby boosting prosperity.

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  • Foreword and Acknowledgements

    Business creation is a vital source of innovation, economic growth and employment creation. Policy makers around the world are increasingly trying to promote policies that foster local entrepreneurship and more innovation-based industries. Empirical evidence has highlighted the importance of the creation of new businesses, which mostly consist of small and medium enterprises (SMEs), for local employment growth and productivity growth. Among SMEs, new or young businesses in particular contribute to local employment. Understanding the scale, heterogeneity and determinants of business creations is therefore conducive to designing entrepreneurship-enhancing policies.

  • Executive summary

    New businesses are not only vital for the creation of employment but also for the development of new ideas that simplify work and production processes and increase productivity. Consequently, business dynamics contribute to regional development and prosperity. Yet, the local reality across the OECD presents a picture of large regional disparities which needs to be understood. While some regions experience a high degree of business births and deaths, other regions only observe low levels of changes in their business population.

  • The case for regional business demography

    This chapter provides the context and rationale for measuring business demography at the regional level. It explains why place is important to assess business dynamics and highlights the most important methodological and empirical challenges in building internationally comparable evidence on the dynamics of businesses and of its related employment across regions. Finally, it synthesises what the report offers and how it can be used by experts and policy makers.

  • Measuring business demography at the level of regions: Methods and challenges

    This chapter presents an assessment of the methodological challenges associated with the development of a regional business demography database encompassing a large number of OECD countries. The chapter also presents a roadmap for future methodological and statistical work necessary to improve our understanding of entrepreneurship and the geography of employment in OECD regions.

  • Regional dynamics from an enterprise approach

    This chapter describes the composition of a new database designed to compare business demography statistics at the subnational level. The database offers unprecedentedly rich subnational information across countries, covering 27 OECD countries in total, out of which 21 include data at the TL3 regional level. The chapter analyses the geographical distribution of business activity (entry, exit and survival rates) and presents evidence on how entrepreneurial activity differs across types of regions. The chapter also analyses how the geographic and institutional characteristics of regions are associated to firm creation and survival over time.

  • Regional business employment dynamics

    This chapter describes regional business dynamics and its related employment. It presents employment creation in new firms across OECD regions and explains the advantages and disadvantage of using establishment- — rather than enterprise- — level data to assess regional employment dynamics. It does so also by illustrating and quantifying the “headquarter bias” as well as discussing the overestimation of the impact of new firms when using establishment-level data. The chapter also examines the spatial distribution of employment dynamics across OECD regions and analyses discrepancies across different types of regions and sectors. This analysis is supplemented by an investigation of regional factors that are connected to regional employment growth in establishments. The chapter concludes by providing evidence on the contribution of small and medium-sized establishments to employment creation and the role of regional factors for employment growth in existing firms.

  • Measuring regional business employment dynamics from micro-aggregation of administrative data

    This chapter presents the OECD DynEmp Regional project, a distributed micro-data project aimed at analysing confidential administrative micro-data on employment dynamics at the level of TL2 regions and metropolitan areas. The chapter presents within-country differences in plant-level employment dynamics for the TL2 regions of Costa Rica, Finland, France and Sweden and the metropolitan areas of France and Sweden. The role of plant characteristics, such as age or size, and regional characteristics, in particular regional productivity, agglomeration economies, innovation and the rural-urban continuum, is also examined. The chapter finally discusses the methodological challenges and the solutions implemented in the first version of the dynemp_reg routine, providing a detailed description of the inputs and outputs of the statistical programme and of the micro-aggregation procedure.

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