Population Change and New Firm Formation in Urban and Rural Regions

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractMany regions across the EU, including the Netherlands, face the challenge of population decline, which entails changing demographics and related social and economic implications. This paper looks into the connection between population change, and population decline in particular, and the rates of new firm formation. Although it is clear that fewer people will eventually lead to fewer (new) firms, we assess whether this negative relationship differs with different rates of population change and across regional contexts. Population decline occurs in different types of regional context, which could also lead to different outcomes. In this study we distinguish between urban and rural areas.In order to establish the impact of population change, and population decline in particular, on entrepreneurship, this paper examines data on population density, size, growth and decline, together with firm dynamics for the period 2003-2009, retrieved from the LISA database. In general, the results show that the relationship between entrepreneurship and population change depends heavily on the regional context. When assessing different levels of population change, we find that its relationship with entrepreneurship depends strongly on the regional context. The results indicate that urban regions tend to experience strong negative impacts as a result of population change, while the impact on rural regions remains positive. In conclusion, we find clear differences in the intensity of the impact of population change on new firm formation according to the type of region. The regional context and the intensity of decline must be taken into account when determining the kind of coping mechanism needed to deal with the consequences of decline.

The geography of new business formation in the Czech Republic: a cross-section analysis (2003-2014)

“…Delfmann et al (2014) describe a general theoretical framework that integrates demand-side and supply-side factors, and also the institutional environment, for explaining regional differences in new business formation. The demand-side factors relate to entrepreneurial opportunities, whereas the supply-side factors relate to people's resources, traits and attitudes to entrepreneurship, and the institutional environment relates to sociocultural aspects of entrepreneurship.…”

“…Two contradictory views are commonly held in existing literature regarding the inuence of unemployment on new business formation. On the one hand, unemployment means less entrepreneurial opportunities because it constrains demand, negatively inuencing new business formation rates (Delfmann et al, 2014;Lafuente & Vaillant, 2010). On the other hand, unemployment increases the supply of potential entrepreneurs, positively inuencing new business formation rates (Bishop, 2012;Armington & Acs, 2002;Audretsch & Fritsch, 1994).…”

“…Lee, Florida & Acs (2004), Delfmann et al (2014) explain this by noting that: (a) foreigners are disadvantaged in the labour market, owing to low education and language barriers; (b) foreigners are more willing to be risk-takers; and (c) foreigners bring with them their own culture, skills and lifestyle. Consequently, higher proportions of foreigners in the population are expected to positively inuence new business formation rates.…”

“…Several authors mention the link between entrepreneurship on the one hand and the nature of regional disparities on the other (Novák & Netrdová, 2011;Barjak, 2001), thereby stimulating the interest in researching regional determinants of new business formation. However, most of these studies concerned 'old' capitalist countries (Bishop, 2012;Fotopoulos, 2014;Delfmann et al, 2014;Armington & Acs, 2002) while only a few studies dealt with determinants of new business formation in the post-communist context (Wyrwich, 2012;Lafuente & Vaillant, 2010;Fritsch et al, 2014;Hájek, Nekolová & Novosák, 2015 as notable exceptions). Therefore, this paper, aiming to identify regional determinants of new business formation in the Czech Republic (2003Republic ( -2014, adds some new evidence to the research debate.…”

The effect of new business creation on employment growth in regions facing population decline

“…In addition, regions with a declining population have to deal with a decreasing labour and consumer market. Despite these processes impeding new business creation, the start-up rate of new firms does not necessarily drop (Delfmann et al 2014). Secondly, the employment effects of new business creation may be mediated by population decline.…”