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

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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.

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