|Generate QR code
Open Access
Subscription Access
New firm formation and regional employment in Russia: Direct and indirect effects
https://doi.org/10.32609/0042-8736-2023-3-102-125
Abstract
Studies of employment growth factors are more relevant during crises. Review of foreign studies and analysis of Russian data in 2005—2018 using a distributed lag model based on the Almon method shows that there are multidirectional short-term direct and longer-term indirect effects of starting a business on employment growth. The regional context is important; and the prevalence of one effect over another and the direction of influence of additional factors depend on the type of region. Thus; for large agglomerations with high labor productivity and an active SME sector; an S-shaped lag structure of the dependence of employment on the creation of new firms was revealed: with short-term positive; medium-term negative; and further positive effects. For regions with low urbanization; labor productivity and a less active SME sector; the most striking is the short-term positive impact on employment from the opening of firms; which is replaced by a negative one after 2—3 years. At the same time; in the latter regions; the total impact may be higher than in the former; and on average; a new firm (per 1;000 people in the workforce) leads to an increase in employment by 0.56 p.p. This provides grounds for some policy recommendations.
Keywords
entrepreneurship,
small business,
regional development,
employment,
Russian regions,
Almon polynomial distributed lag model,
time lags
JEL: L26; M13; O18; R11
About the Authors
D. R. Salimova
Russian Presidential Academy of National Economy and Public Administration
Russian Federation
Russian Federation
Dina R. Salimova
Moscow
Yu. V. Tsareva
Russian Presidential Academy of National Economy and Public Administration
Russian Federation
Russian Federation
Yuliya V. Tsareva
Moscow
S. P. Zemtsov
Russian Presidential Academy of National Economy and Public Administration
Russian Federation
Russian Federation
Stepan P. Zemtsov
Moscow
References
1. Abramov A. E., Aksenov I. V., Radygin A. D., Chernova M. I. (2018). Modern approaches to measuring the state sector: Methodology and empirics. Ekonomicheskaya Politika, Vol. 13, No. 1, pp. 36—69. (In Russian). https://doi.org/10.18288/1994-5124-2018-1-02
2. Barinova V. A., Zemtsov S. P., Tsareva Y. V. (2023). Searching for entrepreneurship in Russia. Part I. What prevents small and medium-sized businesses from developing. Moscow: Delo. (In Russian).
3. Vilensky A. V., Domnina I. N., Maevskaya L. I. (2018). The impact of small business on the socioeconomic development of the regions of the Russian Federation: A scientific report. Moscow: IE RAS. (In Russian).
4. Demidova K. V. (2022). SMEs under anti-Russian sanctions: Results of the first half of the year and possible support measures. Russian Economic Development, Vol. 29, No. 11, pp. 46—58. (In Russian).
5. Gimpelson V. E., Kapeliushnikov R. I. (2015). Russian model of the labor market: A test of the crisis. Journal of the New Economic Association, Vol. 26, No. 2, pp. 249—254. (In Russian).
6. Zemtsov S. P., Tsareva Y. V., Salimova D. R., Barinova V. A. (2021). Small and medium-sized enterprises in Russia: In search of the employment growth factors. Voprosy Ekonomiki, No. 12, pp. 66—93. (In Russian). https://doi.org/10.32609/0042-8736-2021-12-66-93
7. Kapeliushnikov R. (2017). Is technological change a devourer of jobs? Voprosy Ekonomiki, No. 11, pp. 111—140. (In Russian). https://doi.org/10.32609/0042-8736-2017-11-111-140
8. Kudrin A. L., Mau V. A., Radygin A. D., Sinelnikov-Murylev S. G. (eds.) (2022). Russian economy in 2021. Trends and outlooks, Iss. 43. Moscow: Gaidar Institute Publ. (In Russian).
9. Lyashok V. Y. (2022). Labor market in the summer of 2022: Trends and prospects. Russian Economic Development, Vol. 29, No. 11, pp. 77—81. (In Russian).
10. Obraztsova O. I., Chepurenko A. Y. (2020). Entrepreneurial activity in Russia and its interregional differences. Journal of the New Economic Association, Vol. 14, No. 2, pp. 198—210. (In Russian). https://doi.org/10.31737/2221-2264-2020-46-2-12
11. Ponomarev Y. Y., Evdokimov D. Y. (2020). Assessment of extended multiplicative socio-economic effects on the basis of input-output balance model. Russian Economic Development, Vol. 27, No. 7, pp. 30—45. (In Russian).
12. Chepurenko A. Y. (2012). What is entrepreneurship and what entrepreneurship policy does Russia need? (Marginal notes on works of modern foreign classics). Journal of the New Economic Association, Vol. 2, No. 13, pp. 102—124. (In Russian).
13. Yakovlev A. A., Ershova N. V., Uvarova O. M. What kind of Russian firms get state support? The analysis of changes in priorities under crisis conditions. Voprosy Ekonomiki, No. 3, pp. 47—62. (In Russian). https://doi.org/10.32609/0042-8736-2020-3-47-62
14. Acs Z. J., Armington C. (2004). Employment growth and entrepreneurial activity in cities. Regional Studies, Vol. 38, No. 8, pp. 911—927. https://doi.org/10.1080/0034340042000280938
15. Acs Z. J., Mueller P. (2008). Employment effects of business dynamics: Mice, gazelles and elephants. Small Business Economics, Vol. 30, No. 1, pp. 85—100. https://doi.org/10.1007/s11187-007-9052-3
16. Andersson M., Noseleit F. (2011). Start-ups and employment dynamics within and across sectors. Small Business Economics, Vol. 36, No. 4, pp. 461—483. http://doi.org/10.1007/s11187-009-9252-0
17. Audretsch D. B., Fritsch M. (2002). Growth regimes over time and space. Regional Studies, Vol. 36, No. 2, pp. 113—124. https://doi.org/10.1080/00343400220121909
18. Ayyagari M., Demirguc-Kunt A., Maksimovic V. (2014). Who creates jobs in developing countries? Small Business Economics, Vol. 43, No. 1, pp. 75—99. https://doi.org/10.1007/s11187-014-9549-5
19. Baptista R., Preto M. T. (2011). New firm formation and employment growth: Regional and business dynamics. Small Business Economics, Vol. 36, No. 4, pp. 419—442. https://doi.org/10.1007/s11187-009-9254-y
20. Barinova V., Rochhia S., Zemtsov S. (2022). Attracting highly skilled migrants to the Russian regions. Regional Science Policy & Practice, Vol. 14, No. 1, pp. 147—173. https://doi.org/10.1111/rsp3.12467
21. Birch D. G. (1987). Job creation in America: How our smallest companies put the most people to work. New York: The Free Press.
22. Birch D., Medoff J. (2019). Gazelles. In: L. C. Solmon (ed.). Labor markets, employment policy, and job creation. Routledge, рр. 159—167. https://doi.org/10.4324/9780429046834-7
23. Carod J. M. A., Solís D. L., Bofarull M. M. (2008). New business formation and employment growth: Some evidence for the Spanish manufacturing industry. Small Business Economics, Vol. 30, No. 1, pp. 73—84. https://doi.org/10.1007/s11187-007-9051-4
24. Carree M. A., Thurik R. (2010). The impact of entrepreneurship on economic growth. In: Z. Acs, D. Audretsch (eds.). Handbook of entrepreneurship research. New York: Springer, pp. 557—594. http://doi.org/10.1007/978-1-4419-1191-9_20
25. Criscuolo C., Gal P., Menon C. (2014). The dynamics of employment growth: New evidence from 18 countries. OECD Science, Technology and Industry Policy Papers, No. 14, Paris: OECD Publishing. https://doi.org/10.1787/5jz417hj6hg6-en
26. Delfmann H., Koster S. (2016). The effect of new business creation on employment growth in regions facing population decline. Annals of Regional Science, Vol. 56, No. 1, pp. 33—54. https://doi.org/10.1007/s00168-015-0738-1
27. Feldman M. P. (1994). The geography of innovation. Dordrecht: Springer Science & Business Media. https://doi.org/10.1007/978-94-017-3333-5
28. Fritsch M., Mueller P. (2004). The effects of new business formation on regional development over time. Regional Studies, Vol. 38, No. 8, pp. 961—975. https://doi.org/10.1080/0034340042000280965
29. Fritsch M., Mueller P. (2008). The effect of new business formation on regional development over time: Тhe case of Germany. Small Business Economics, No. 30, pp. 15—29. https://doi.org/10.1007/s11187-007-9067-9
30. Fritsch M., Noseleit F. (2013). Investigating the anatomy of the employment effect of new business formation. Cambridge Journal of Economics, Vol. 37, No. 2, pp. 349—377. https://doi.org/10.1093/cje/bes030
31. Fritsch M., Schroeter A. (2011). Why does the effect of new business formation differ across regions? Small Business Economics, Vol. 36, No. 4, pp. 383—400. https://doi.org/10.1007/s11187-009-9256-9
32. Glaeser E. L., Kallal H. D., Scheinkman J. A., Shleifer A. (1992). Growth in cities. Journal of Political Economy, Vol. 100, No. 6, pp. 1126—1152. https://doi.org/10.1086/261856
33. Goswami A., Medvedev D., Olafsen E. (2018). High-growth firms: Facts and fiction of high growth entrepreneurship in developing countries. Washington, DC: World Bank. https://doi.org/10.1596/978-1-4648-1368-9
34. Kachlami H., Davidsson P., Obschonka M., Yazdanfar D., Lundström A. (2020). The regional employment effects of new social firm entry. Small Business Economics, Vol. 57, No. 3, pp. 1221—1241. https://doi.org/10.1007/s11187-020-00345-9
35. Knaup A. E. (2005). Survival and longevity in the business employment dynamics data. Monthly Labor Review, Vol. 128, pp. 50—56.
36. Mueller P., Van Stel A., Storey D. J. (2008). The effects of new firm formation on regional development over time: The case of Great Britain. Small Business Economics, Vol. 30, No. 1, pp. 59—71. https://doi.org/10.1007/s11187-007-9056-z
37. Pilyasov A. N. (2020). Arctic entrepreneurship development factors. Geography, Environment, Sustainability, Vol. 13, No. 1, рр. 46—56. https://doi.org/10.24057/2071-9388-2019-91
38. Rho S., Gao J. (2012). Employment effect of entrepreneurial activity in China’s private economy. Seoul Journal of Economics, Vol. 25, No. 2, pp. 177—206. http://doi.org/10.22904/sje.2012.25.2.003
39. Shane S. (2009). Why encouraging more people to become entrepreneurs is bad public policy. Small Business Economics, Vol. 33, No. 2, pp. 141—149. https://doi.org/10.1007/s11187-009-9215-5
40. Storey D. J. (ed.) (2016). Entrepreneurship and new firm. London: Routledge. https://doi.org/10.4324/9781315544502
41. Storey D. J., Johnson S. (1987). Job generation and labour market change. London: Palgrave Macmillan. https://doi.org/10.1007/978-1-349-18850-5
42. Storey D. J., Keasey K., Watson R., Wynarczyk P. (2016). The performance of small firms: Рrofits, jobs and failures. London: Routledge. https://doi.org/10.4324/9781315544274
43. Van Stel A., Storey D. (2004). The link between firm births and job creation: Is there a upas tree effect? Regional Studies, Vol. 38, No. 8, pp. 893—909. https://doi.org/10.1080/0034340042000280929
44. Van Stel A., Suddle K. (2008). The impact of new firm formation on regional development in the Netherlands. Small Business Economics, Vol. 30, No. 1, рр. 31—47. https://doi.org/10.1007/s11187-007-9054-1
Supplementary files
Review
For citations:
Salimova D.R., Tsareva Yu.V., Zemtsov S.P. New firm formation and regional employment in Russia: Direct and indirect effects. Voprosy Ekonomiki. 2023;(3):102-125. (In Russ.) https://doi.org/10.32609/0042-8736-2023-3-102-125
Views:
844
Email this article 
