OECD Science, Technology and Industry Working Papers
The OECD Directorate for Science, Technology and Innovation (STI) leads OECD research on the contribution of science, technology and industry to well-being and economic growth. STI Working Papers cover a broad range of topics including definition and measurement of science and technology indicators, global value chains, and research on policies to promote innovation. These technical or analytical working papers are prepared by staff or outside consultants to share early insights and elicit feedback.
- ISSN: 18151965 (online)
- https://doi.org/10.1787/18151965
Cross-country evidence on start-up dynamics
The report provides a description of start-up dynamics exploiting the richness of the recently collected DynEmp v.2 database. The contribution of new firms in terms of new jobs to the existing workforce can be expressed as a combination of four different elements: the start-up rate; the average size of firms at point of entry; the survival rate; and the average growth rate of survivors. This decomposition shows that the four elements interplay in very different ways, even across economies with similar aggregate start-up contributions. The most homogenous component across countries is the survival rate, which is equal to just above 60% after three years from entry, to about 50% after five years, and to just over 40% after seven years. Furthermore, in most countries the probability of exiting is highest at the age of two, and decreases (linearly) beyond that age. When looking at employment growth of surviving businesses, it is found that the large majority of surviving micro start-ups do not grow; however, the tiny proportion of small start-ups which do grow creates a disproportionate amount of jobs.
Keywords: employment dynamics, firm demographics, start-ups, entrepreneurship
JEL:
L11: Industrial Organization / Market Structure, Firm Strategy, and Market Performance / Production, Pricing, and Market Structure; Size Distribution of Firms;
L26: Industrial Organization / Firm Objectives, Organization, and Behavior / Entrepreneurship;
D22: Microeconomics / Production and Organizations / Firm Behavior: Empirical Analysis
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