Abstract
In this paper the determinants of new firm formation in the producer services are studied by using National Security data on firms with at least one employee. Two ratios are computed and analysed for the 95 Italian provinces: an index of fertility represented by the share of new enterprises on employees, and a birth rate represented for each province by the ratio between new enterprises and resident population. On examination of the determinants of this process, we found that the average wage rates and the ratio of utilized credit to the total line of credit negatively affect both indexes, and that both indexes are affected positively by sector growth and by a measure of small firm presence. The index of fertility is also explained by a dummy variable which identifies for each province those policies which are aimed at fostering the process of new firm formation. The birth rate is instead affected by a dummy variable which is equal to one for the provinces in which the chief towns of each region are located and zero otherwise, and by the potential demand for new producer services arising from the industrial sector.
Similar content being viewed by others
References
Acs, Z. J. and D. B. Audretsch, 1989, ‘Small-firm Entry in US Manufacturing’,Economica 56(2), 255–265
Audretsch, D. B. and M. Vivarelli, 1993, ‘New Firm Start-Ups in Italy’, CEPRDiscussion Paper, #864, November.
Berry, B. J. L., 1973,Growth Centers in the American Urban System, Cambridge, Mass.: Ballinger.
Blau, D. M., 1987, ‘A Time Series Analysis of Self-Employment in the United States’,Journal of Political Economy 95(2), 445–467.
Cappellin, R., 1986, ‘The Development of Service Activities in the Italian Urban System’, in I. Elleris (ed.),The Present and Future Role of Services in Regional Development, Bruxelles: EEC Publications.
Caselli, G. and G. Pastrello, 1984, ‘L'integrazione industriaterziario in Italia tra il 1965 ed il 1975. Un'analisi input-output mediante scomposizione dei coefficienti di attivazione’,L'Industria 5(3), 379–397.
Coffey, W. J. and M. Polèse, 1986, ‘The Interurban Location of Office Activities: A Framework for Analysis’, in D. J. Savoie (ed.),The Canadian Economy: A Regional Perspective, Toronto: Methuen.
Coffey, W. J. and M. Polèse, 1989, ‘Producer Services and Regional Development: A Policy-Oriented Perspective’,Papers of the Regional Science Association 67, 13–27.
Contini, B. and R. Revelli, 1992,Imprese, occupazione e retributzioni al microscopio, Bologna: il Mulino.
Cotterill, R. W. and L. H. Haller, 1992, ‘Barrier and Queue Effects: A Study of Leading US Supermarket Chain Entry Patterns’,Journal of Industrial Economics 40(4), 427–440.
Creedy, J. and P. S. Johnson, 1983, ‘Firm Formation in Manufacturing Industry’,Applied Economics 15(2), 177–185.
Garofoli, G., 1992, ‘New Firm Formation and Local Development: The Italian Experience’,Entrepreneurship & Regional Development 4(2), 101–125.
Gershuny, J. I. and I. D. Miles, 1984,The New Service Economy, London: Frances Pinter.
Gillespie, A. E. and A. E. Green, 1987, ‘The Changing Geography of Producer Services Employment in Britain’,Regional Studies 21(5), 397–411.
Johnson, P. S. and D. G. Cathcart, 1979, ‘The Founders of New Manufacturing Firms: A Note on the Size of Their Incubator Plants’,Journal of Industrial Economics 28(2), 167–184.
Jovanovic, B., 1982, ‘Selection and the Evolution of Industry’,Econometrica 50(3), 649–670.
Judge, G., W. Griffiths, C. Hill and T. Lee, 1980,The Theory and Practice of Econometrics, New York: John Wiley & Sons.
Kihlstrom, R. E. and J. J. Laffont, 1979, ‘A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion’,Journal of Political Economy 87(4), 719–748.
Lucas, R. E., Jr., 1978, ‘On the Size Distribution of Business Firms’,Bell Journal of Economics 9(2), 508–523.
Momigliano, F. and D. Siniscalco, 1982, ‘The Growth of Service Employment: A Reappraisal’,Banca Nazionale del Lavoro — Quarterly Review 35(142), 269–306.
Piergiovanni, R. and E. Santarelli, 1994, ‘La demografia d'impresa nel comparto dei servizi alla produzione in Italia. Un'analisi territoriale’,Note Economiche 24(1), 110–136.
Santarelli, E. and A. Sterlacchini, 1994, ‘New Firm Formation in Italian Industry: 1985–1989’,Small Business Economics 6(2), 95–106.
Storey, D. J. and A. M. Jones, 1987, ‘New Firm Formation. A Labour Market Approach to Industrial Entry’,Scottish Journal of Political Economy 34(1), 37–51.
Storey, D., 1982,Entrepreneurship and the New Firm, London: Croom Helm.
Thompson, W., 1968, ‘Internal and External Factors in the Development of Urban Economics’, in H. S. Perloff and L. Wingo (eds.),Issues in Urban Economics, Washington: John Hopkins Press.
Vivarelli, M., 1991, ‘The Birth of New Enterprises’,Small Business Economics 3(2), 215–233.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Santarelli, E., Piergiovanni, R. The determinants of firm start-up and entry in Italian producer services. Small Bus Econ 7, 221–230 (1995). https://doi.org/10.1007/BF01135367
Accepted:
Issue Date:
DOI: https://doi.org/10.1007/BF01135367