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Interdependencies in the Dynamics of Entry and Exit

PublicationArticle (with peer review)
Arbetsliv, Arbetsmarknad, Entry, Industri, Kristina Nyström

Abstract

This paper investigates the interdependence between firm entry and exit from an industrial dynamics perspective. The paper discusses how entry and exit rates in industrial sectors are affected by previous exit and entry rates. Economic theory presents two different approaches to how entry and exit of firms are interrelated, the multiplier effect and the competition effect. This paper intends to investigate which force is the predominant one, for entry and exit patterns, respectively. The empirical analysis is based on data for 25 Swedish manufacturing industries at the 2-digit SIC level, during the period 1991–2000. In the estimation work the study applies a dynamic panel data approach as suggested by Anderson and Hsiao [Journal of the American Statistical Association, 76:598–606, 1981] and Arellano and Bond [Review of Economic Studies, 58(2):277–297, 1991]. With respect to entry, the empirical results support the multiplier effect such that entry stimulates future entry, but also a competition effect such that past exit induces additional entry. With regard to exit, on the other hand, the competition effect rules, implying that previous entry causes subsequent exit and previous exit reduces subsequent exit.

Nyström, K. (2007). ”Interdependencies in the Dynamics of Entry and Exit.”Journal of Industry, Competition and Trade, 7(2): 113-130.

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Recruitment of scarce competences to rural regions: Policy perspectives
Article (with peer review)Publication
Nyström, K.
Publication year

2021

Published in

Review of regional research.

Abstract

This paper studies the perceived difficulty of recruiting scarce competencies to rural regions. Furthermore, the role of policy in facilitating and enhancing recruitment to and better skills matching in rural regions is discussed. Based on a survey targeted to the business sections of Swedish municipalities, the results show that recruitment is perceived to be difficult in both rural and nonrural regions and that the difficulty of recruiting for the right skills results in a lack of skills matching and constitutes an obstacle to growth. Rural regions located close to urban areas can to some extent mitigate these recruitment problems, and their locations pose less of a barrier in recruitment processes compared to those of remotely located rural regions.

Which policies can help remedy recruitment problems faced in rural regions? In both rural and nonrural regions, incentives for writing off student debt and relocation support for accompanying persons and tandem recruitment are perceived to be the most promising policies. Rural regions are more receptive to the implementation of such policies. Finally, the need for flexibility and policies that can be adapted to the regional demand for labour are stressed.

Nyström, K. Recruitment of scarce competences to rural regions: Policy perspectives. Rev Reg Res (2021). https://doi.org/10.1007/s10037-021-00155-

Working for an entrepreneur: heaven or hell?
Article (with peer review)Publication
Nyström, K.
Publication year

2021

Abstract

Recruiting employees to an entrepreneurial venture is a challenging task. From the employee’s perspective, accepting a position in an entrepreneurial venture potentially implies considerable uncertainty. This paper provide a literature review and identifies research gaps related to labor mobility of employees into and out of entrepreneurial firms. Who works for an entrepreneur? What are the conditions under which the employees of entrepreneurial firms work? Additionally, labor mobility after an employee works for an entrepreneurial firm is discussed. In conclusion, the quality of the jobs generated by entrepreneurial firms may be questionable (and still relatively unexplored in empirical research), but they are nevertheless important from a labor dynamic perspective. Better understanding about motives to work for an entrepreneur, issues related to job security beyond survival rates, and job quality may contribute to ease the recruitment problems that many entrepreneurial firms struggle with. Furthermore, the relevance and potential pros and cons of working for an entrepreneurial firm in future career paths (entrepreneur or employee) need to be carefully addressed in future research.

Regional resilience to displacements
Article (with peer review)Publication
Nyström, K.
Publication year

2018

Published in
Abstract

This paper contributes to knowledge about regional resilience to displacement and examines the extent to which the characteristics of the (1) regional closures, (2) individuals in a region, (3) regional industry, (4) regional economy and (5) regional attractiveness influence the re-employment of displaced employees. Regions where the average size of establishment closures is large or the regional displacement rate is high exhibit increased resilience in terms of re-employing displaced employees in the same region. Unrelated and related industrial variety are positively related to resilience to displacement in regions with low re-employment capacities, whereas there is some evidence that regional attractiveness is positively related to resilience in regions with a good ability to re-employ displaced employees in the same region.

Related content: Working paper No. 276

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