Handbook of Research on Entrepreneurship and Regional Development

Handbook of Research on Entrepreneurship and Regional Development

National and Regional Perspectives

Elgar original reference

Edited by Michael Fritsch

Recent research has found pronounced differences in the level of entrepreneurship and new business formation across various regions and nations. This timely Handbook reveals that the development of new ventures as well as their effects on overall economic growth are strongly shaped by their regional and national environment. The expert group of contributors gives an overview on the current state of the art in this field, and proposes avenues for further investigation. Topics include the regional determinants of new business formation, the effects of start-ups on growth, the role of globalization for regional entrepreneurship, the effect of national and regional framework conditions, as well as the role of universities as incubators of innovative new firms.

Chapter 6: High-Impact Firms: Gazelles Revisited

Zoltan J. Acs

Subjects: business and management, entrepreneurship, economics and finance, regional economics, urban and regional studies, regional economics


Zoltan J. Acs INTRODUCTION One aspect of Birch’s work that is especially interesting focuses on the classification of different types (ages and sizes) of establishments. This focus yielded the findings on job creation for which he is best known. Birch finds that ‘Of all the net new jobs created in our sample of 5.6 million businesses between 1969 and 1976, two-thirds were created by firms with 20 or fewer employees’ (Birch, 1981, 7). Between 1976 and 1982, firms with fewer than 100 employees created 82 percent of the jobs. Birch goes on to say, ‘Another distinguishing characteristic of job replacers is their youth. About 80 percent of the replacement jobs are created by establishments four years old or younger’. Finally, ‘Whatever they are doing, however, large firms are no longer the major providers of new jobs for Americans’ (p. 8).1 In 1994, Birch suggested that perhaps it is not large or small firms that are important for job growth but gazelles. One conclusion was that the distinction between small and large firms as job creators is of less importance – most jobs are created by gazelles, which are firms that are neither large nor small. ‘These gazelles move between small and large quickly – at various times in either direction – and to classify them by their size is to miss their unique characteristics: great innovation and rapid job growth’ (Birch and Medoff, 1994, 163). A conclusion of the Birch and Medoff study was that a small number (4 percent) of ongoing...

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