SimFirms:demography of firms: a microsimulation model

Abstract

The outline of this thesis is as follows. Starting from the simple question ‘How many firms are there?’ the available data in the Netherlands is discussed, compared and described in chapter 2. This chapter gives a general overview on the several aspects of ‘firmography’ in the Netherlands and concludes with an international comparison. The chapters 3 through 6 and 8 cover the firmographic events that are later on used in the simulation model. For each of the events, the data and developments are described, theories are applied and models are sought for that explain variations and trends. The models should not only be able to describe the data but should also be able to predict the future events. These five chapters use the LISA database for the province of Gelderland as input. Chapter 3 covers the event of start-up firms, and chapter 4 the event of the termination of establishments. Chapter 5 handles the migration of firms. Since both events migration and start-ups are based on a two step decision, namely first the decision to migrate (or start), and next the location choice, the location choice is covered in a separate chapter (chapter 6: where to?). Chapter 7 continues with the spatial aspects of SimFirms. In this chapter it is analysed how the firmographic events start-ups and closures influence the clustering of firms, using spatial analysis techniques originally developed within the field of epidemiology. Chapter 8 handles the last event, the growth of firms (in terms of numbers of employees). In chapter 9 all the models described in chapters 3 through 8 are brought together in the full simulation model SimFirms. This chapter describes the validation, calibration and randomness issues that were encountered. In this chapter we further explain how we dealt with the labour market tension mentioned earlier, and we give some initial results of the baseline model. In chapter 10 three different scenarios are formulated and used as input in SimFirms to estimate different developments. These scenarios are labelled: ‘improved investment climate’, ‘attraction of the city-region’ and ‘credit crunch’. The effects of the scenarios are discussed. This thesis ends with chapter 11 in which conclusions are drawn and the most important findings are being evaluated.