The demography of entrepreneurs and enterprises

Industrial dynamics is increasingly studied from a demographic perspective. Demography of firms is one of the research methods to describe and analyse the evolution of industries. Although this is a very useful and promising interdisciplinary field of study, there are a number of conceptual problems when dealing with the formal demography of firms, and especially in the demographic component of firm start-ups. Fertility or parenthood is not clearly defined here, and occurrence-exposure rates or probabilities of giving birth to a firm are difficult to define. An alternative way of looking at the process of firm start-ups is to view the process as essentially driven by decisions of entrepreneurs within a labour market setting. A worker may decide to be an employee, to be self-employed or an entrepreneur. Although there is not a one-to-one correspondence between entrepreneurs and enterprises, the behaviour of more than 90 percent of firms can be studied from an individual entrepreneurial point of view. There is a large methodological advantage when taking the labour market point of view. Standard demographic tools may be used for describing, analysing and even conditional forecasting of the process. This paper shows how multidimensional demographic models may be used in describing and analysing the process of firm start-ups from an entrepreneurial perspective.

A multistate demographic model for firms in the province of Gelderland

In the last two decades researchers from various disciplines have made attempts to model and estimate developments in the size and structure of the population of firms. Although these attempts give useful insights into possible explanatory factors of firm dynamics, the explanatory value, and hence predictive power of these models is usually not very high. In this paper we follow a pure demographic approach for the modelling of firm survival. Important dimensions of the firm are firm age, firm size (in number of employees), economic activity and firm location. Using empirical firm level data for the region of Gelderland in the Netherlands over the period 1986-2002, developments in survival are described and analysed over time in an age-period-cohort perspective. In a later phase of the project, these (aggregated) scenarios will serve as a point of reference for comparisons to more extended model specifications using micro-simulation that include additional explanatory and spatial variables. Keywords: demography of the firm, Age-Period-Cohort model, firm survival, closures

SIMFIRMS - SIMULATING THE SPATIAL DEMOGRAPHY OF FIRMS, WITH AN APPLICATION IN THE NETHERLANDS

Recently, there is an increasing demand in spatial planning for models based on the demographic concepts of birth and death of firms. This paper describes the structure of a spatial demographic simulation model of firms, and its application within the Netherlands. The model structure is essentially of the familiar demographic cohort component type, where an initial cohort of firms ages in a number of discrete steps, and where in each step additions and subtractions to and from the population are modelled using birth, death and migration components. Apart from the central processes of birth, death and migration, the type of economic activity and firm size are highly important for understanding firm behaviour over time. The paper describes the transition functions for each of the demographic components and for firm growth. In addition, some empirical results are presented of a number of model simulations in the Netherlands. The results were partly validated using observed economic demographic data. It is concluded that a substantial amount of work remains to be done in this new field. The model presented here has direct implications for the research agenda of the study of the demography of the firm.

Geographical scale and the role of firm migration in spatial economic dynamics

Spatial economic change can be decomposed in it's demographic constituents firm formation, closure, relocation and growth. This paper focusses on the role of relocation in the balancing equation of spatial economic dynamics: Total Change(zone i) = New firms(i)-Closures(i)+ Growth(i)-Decline(i)+ Inmoves(i)-Outmoves(i). Whereas the other components are scale invariant (i.e. a firm birth is a birth whether measured at the local or the regional level) for firm relocation the geographical scale is very important. The larger the size of the region, the smaller the number of border crossing relocations. The question about the role of firm migration in regional economic change can therefore only be answered taking into account the geographical scale. In this paper we will answer this question for various geographical scales. The data that we use are from the longitudinal business register of the province of Gelderland, in the east of the Netherlands, covering the period 1988-2002.

A model of internal firm relocation in the Netherlands

This paper presents a model of internal relocation of firms in the Netherlands. Firm relocation is driven both by firm internal factors, such as growth, age, and type of activity, as well as external factors, relating to the business cycle, the geographical environment, the composition of the labour force, and the composition of the firm popuation, as well as linkages with other firms. Using a unique longitudinal database of firms in the Province of Gelderland in the Netherlands, we specify and estimate two related models of firm relocation. The decomposition of the migration process in two subprocesses is consitent with the theory of a two stage decision process, whereby in th first stage the firm decides to move, and in the second step it chooses an alternative destination. Different factors are important in both stages of the process.

Explaining new trends in the gender gap of mortality: Insights from a regional trend- analysis of the Netherlands

The recent decrease of the male-female mortality gap in Western Europe has been accompanied by changes in the life style, educational level, family roles and employment of women. In this paper we try to find out whether a relationship indeed exists between the increase in gender equality and the decrease in the male/female mortality difference. We used regional-level data for the Netherlands for the periods 1980-83 and 1996-99 on gender differences in life expectancy, by age group and cause of death, and various measures of gender inequality on the same regional level. In doing this we followed as far as possible a framework recently developed by Ingrid Waldron to analyse changes in gender differences in mortality in the US. The cross-sectional analyses showed that in 1980-83 it was rather socioeconomic than gender role variables that were important in explaining gender difference in mortality, while in the period 1996-99, it was the other way around.

The demography of entrepreneurs and enterprises

Industrial dynamics is increasingly studied from a demographic perspective. Demography of firms is one of the research methods to describe and analyse the evolution of industries. Although this is a very useful and promising interdisciplinary field of study, there are a number of conceptual problems when dealing with the formal demography of firms, and especially in the demographic component of firm start-ups. Fertility or parenthood is not clearly defined here, and occurrence-exposure rates or probabilities of giving birth to a firm are difficult to define. An alternative way of looking at the process of firm start-ups is to view the process as essentially driven by decisions of entrepreneurs within a labour market setting. A worker may decide to be an employee, to be self-employed or an entrepreneur. Although there is not a one-to-one correspondence between entrepreneurs and enterprises, the behaviour of more than 90 percent of firms can be studied from an individual entrepreneurial point of view. There is a large methodological advantage when taking the labour market point of view. Standard demographic tools may be used for describing, analysing and even conditional forecasting of the process. This paper shows how multidimensional demographic models may be used in describing and analysing the process of firm start-ups from an entrepreneurial perspective

A multistate demographic model for firms in the province of Gelderland

In the last two decades researchers from various disciplines have made attempts to model and estimate developments in the size and structure of the population of firms. Although these attempts give useful insights into possible explanatory factors of firm dynamics, the explanatory value, and hence predictive power of these models is usually not very high. In this paper we follow a pure demographic approach for the modelling of firm survival. Important dimensions of the firm are firm age, firm size (in number of employees), economic activity and firm location. Using empirical firm level data for the region of Gelderland in the Netherlands over the period 1986-2002, developments in survival are described and analysed over time in an age-period-cohort perspective. In a later phase of the project, these (aggregated) scenarios will serve as a point of reference for comparisons to more extended model specifications using micro-simulation that include additional explanatory and spatial variables. Keywords: demography of the firm, Age-Period-Cohort model, firm survival, closure

Geographical scale and the role of firm migration in spatial economic dynamics

Spatial economic change can be decomposed in it's demographic constituents firm formation, closure, relocation and growth. This paper focusses on the role of relocation in the balancing equation of spatial economic dynamics: Total Change(zone i) = New firms(i)-Closures(i)+ Growth(i)-Decline(i)+ Inmoves(i)-Outmoves(i). Whereas the other components are scale invariant (i.e. a firm birth is a birth whether measured at the local or the regional level) for firm relocation the geographical scale is very important. The larger the size of the region, the smaller the number of border crossing relocations. The question about the role of firm migration in regional economic change can therefore only be answered taking into account the geographical scale. In this paper we will answer this question for various geographical scales. The data that we use are from the longitudinal business register of the province of Gelderland, in the east of the Netherlands, covering the period 1988-2002

A model of internal firm relocation in the Netherlands

This paper presents a model of internal relocation of firms in the Netherlands. Firm relocation is driven both by firm internal factors, such as growth, age, and type of activity, as well as external factors, relating to the business cycle, the geographical environment, the composition of the labour force, and the composition of the firm popuation, as well as linkages with other firms. Using a unique longitudinal database of firms in the Province of Gelderland in the Netherlands, we specify and estimate two related models of firm relocation. The decomposition of the migration process in two subprocesses is consitent with the theory of a two stage decision process, whereby in th first stage the firm decides to move, and in the second step it chooses an alternative destination. Different factors are important in both stages of the process