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The link between firm births and job creation: Is there a Upas Tree effect?

Taylor & Francis
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  • Design
  • Economics


This paper examines the relationship between firm births and job creation in Great Britain. It uses a new data set for 60 British regions, covering the whole of Great Britain, between 1980 and 1998. For Great Britain as a whole, no significant relationship between start-ups and employment creation is found in the 1980s, but there is a negative relationship for the 'low enterprise' area of the North East of England. For the 1990s, a significant positive relationship for Great Britain as a whole is found, but for Scotland, which focused policy on start-ups, a negative relationship is found. The authors feel this raises questions over policies designed to raise rates of new firm formation as a strategy for employment creation, particularly in 'low enterprise' areas

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