Regional business employment dynamics

This chapter describes regional business dynamics and its related employment. It presents employment creation in new firms across OECD regions and explains the advantages and disadvantage of using establishment- — rather than enterprise- — level data to assess regional employment dynamics. It does so also by illustrating and quantifying the “headquarter bias” as well as discussing the overestimation of the impact of new firms when using establishment-level data. The chapter also examines the spatial distribution of employment dynamics across OECD regions and analyses discrepancies across different types of regions and sectors. This analysis is supplemented by an investigation of regional factors that are connected to regional employment growth in establishments. The chapter concludes by providing evidence on the contribution of small and medium-sized establishments to employment creation and the role of regional factors for employment growth in existing firms.