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The Effect of New Business Formation on Regional Development over Time: The Case of Germany

This paper investigates the effects of new business formation on employment change in German regions. The different phases of the effects of new business formation on regional development are relatively pronounced in agglomerations as well as in regions with a high-level of labor productivity. In low-productivity regions, the overall employment effect of new business formation activity might be negative. The interregional differences indicate that regional factors play an important role.