The survival half-life of firms and its effect on economic development

an article by James Derbyshire (Anglia Ruskin University, UK) published in Local Economy Volume 28 Number 1 (February 2013)

Abstract

Shane (2009) has suggested that encouraging more people to become entrepreneurs is bad public policy because it is existing firms that bring jobs and productivity growth and not new firms.

To test this view this article shifts the perspective onto existing firms and away from start-up by examining firm survivability in the regions and countries of the UK and its relationship with employment and productivity growth.

The article provides some evidence to support Shane’s (2009) view that it is existing firms that are important for economic development.

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