The Growth and Job Creation of Spin-Offs: Empirical Evidence from Denmark

EVOLUTION, ORGANIZATION AND ECONOMIC BEHAVIOR, Guido Buenstorf, ed., Cheltenham: Edward Elgar, 2011

34 Pages Posted: 1 Apr 2010 Last revised: 12 Nov 2011

See all articles by Michael S. Dahl

Michael S. Dahl

Aalborg University Business School

Pernille Gjerløv-Juel

Aalborg University - Department of Business and Management

Date Written: April 26, 2011

Abstract

Employment is often the primary motivation behind entrepreneurial and industrial policy. But new firms are known to differ greatly in performance. Not every new firm survives and even fewer achieve high growth rates. It is well established that spin-offs – firms founded by employees from incumbent firms in the same industry – outlive other types of entrants. Survival of new firms is a requisite for a long-term contribution to employment. But are spin-offs more successful than other firms in terms of employment growth as well? Or is there a trade-off between growth and survival exists as seen for older firms? Exploring a comprehensive dataset covering all entrants in the Danish economy from 1995 to 2004, we investigate how the job creation and employment growth of spin-offs differs from that of other entrants in terms of growth rates, variation and sustainability. We find that spin-offs are not only surviving longer, they also constitute a more homogeneous group, show increased stability in growth patterns and are relatively more important for job creation in the economy compared to other entrants.

Keywords: Spin-off, Growth, Job creation, Contribution to the economy

JEL Classification: E60, M16

Suggested Citation

Dahl, Michael Slavensky and Gjerløv-Juel, Pernille, The Growth and Job Creation of Spin-Offs: Empirical Evidence from Denmark (April 26, 2011). EVOLUTION, ORGANIZATION AND ECONOMIC BEHAVIOR, Guido Buenstorf, ed., Cheltenham: Edward Elgar, 2011, Available at SSRN: https://ssrn.com/abstract=1581741

Michael Slavensky Dahl (Contact Author)

Aalborg University Business School ( email )

Fibigerstraede 11
Aalborg Ø, 9220
Denmark

HOME PAGE: http://msdahl.net

Pernille Gjerløv-Juel

Aalborg University - Department of Business and Management ( email )

Denmark

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