Cross-national comparisons of the variation in new firm formation rates (Reprinted from vol. 28, p. 443, 1994)

Abstract

Births of new firms have been seen to be a major source of new employment creation in developed countries, In the European Community (EC), government policy for much of the 1980s focused upon encouraging the startup of new enterprises. This research examines birth rates of new firms by region in France, Germany (West), Italy, Ireland and the United Kingdom. Comparison is also made with similar studies which have been conducted in parallel for Sweden and the United States. The key findings of the study are twofold. First, the average new firm birth rates are roughly similar across countries and there are similar regional variations within all countries; the most fertile regions have annual new firm birth rates that are two to four times higher than the least fertile regions. Second, the underlying processes affecting new firm births at the regional level appear uniform across countries. Consequently, we suggest that the main empirical findings are likely to apply to populations of new firms in other advanced market economics, including those in the EC.