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Has the Swedish business sector become more entrepreneurial than the US business sector?

Heyman, Fredrik LU ; Norbäck, Pehr Johan ; Persson, Lars LU and Andersson, Fredrik LU (2019) In Research Policy 48(7). p.1809-1822
Abstract

Recent studies document a 30-year decline in various measures of entrepreneurship in the U.S. Using detailed Swedish employer-employee data over the period from 1990 to 2013, we find young firms to be more prominent in the Swedish business sector than in the U.S. business sector. Young Swedish firms, aged five years or less, account for more than half of all firms during this period. We also observe an increase in Swedish entrepreneurial activity for start-ups. However, since the mid-2000s, job destruction rates for young firms have been increasing, which implies a declining employment share for younger firms. Moreover, most of the job creation by young firms occurs in the expanding service sector. We discuss different explanations for... (More)

Recent studies document a 30-year decline in various measures of entrepreneurship in the U.S. Using detailed Swedish employer-employee data over the period from 1990 to 2013, we find young firms to be more prominent in the Swedish business sector than in the U.S. business sector. Young Swedish firms, aged five years or less, account for more than half of all firms during this period. We also observe an increase in Swedish entrepreneurial activity for start-ups. However, since the mid-2000s, job destruction rates for young firms have been increasing, which implies a declining employment share for younger firms. Moreover, most of the job creation by young firms occurs in the expanding service sector. We discuss different explanations for why Sweden appears not to have the same strong decline in entrepreneurial activity as the U.S. has had during the last two decades. We argue that one important explanation is the economic reforms that were implemented in Sweden in the 1990s that mitigated several hurdles to entrepreneurship.

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author
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Entrepreneurship, Industrial structure and structural change, Job dynamics, Matched employer-employee data
in
Research Policy
volume
48
issue
7
pages
14 pages
publisher
Elsevier
external identifiers
  • scopus:85064810006
ISSN
0048-7333
DOI
10.1016/j.respol.2019.04.007
language
English
LU publication?
no
id
300dc553-934e-458d-821e-66ccf2c1a996
date added to LUP
2019-06-03 08:15:11
date last changed
2020-03-29 07:40:50
@article{300dc553-934e-458d-821e-66ccf2c1a996,
  abstract     = {<p>Recent studies document a 30-year decline in various measures of entrepreneurship in the U.S. Using detailed Swedish employer-employee data over the period from 1990 to 2013, we find young firms to be more prominent in the Swedish business sector than in the U.S. business sector. Young Swedish firms, aged five years or less, account for more than half of all firms during this period. We also observe an increase in Swedish entrepreneurial activity for start-ups. However, since the mid-2000s, job destruction rates for young firms have been increasing, which implies a declining employment share for younger firms. Moreover, most of the job creation by young firms occurs in the expanding service sector. We discuss different explanations for why Sweden appears not to have the same strong decline in entrepreneurial activity as the U.S. has had during the last two decades. We argue that one important explanation is the economic reforms that were implemented in Sweden in the 1990s that mitigated several hurdles to entrepreneurship.</p>},
  author       = {Heyman, Fredrik and Norbäck, Pehr Johan and Persson, Lars and Andersson, Fredrik},
  issn         = {0048-7333},
  language     = {eng},
  month        = {09},
  number       = {7},
  pages        = {1809--1822},
  publisher    = {Elsevier},
  series       = {Research Policy},
  title        = {Has the Swedish business sector become more entrepreneurial than the US business sector?},
  url          = {http://dx.doi.org/10.1016/j.respol.2019.04.007},
  doi          = {10.1016/j.respol.2019.04.007},
  volume       = {48},
  year         = {2019},
}