Journal Article

Unemployment and New Business Formation – New Insights into a Complex Relationship


  • Dohse
  • D.
  • Vaona
  • A.
Publication Date

The article analyses the interrelation between unemployment and new business formation using panel data for a large cross-section of countries. We find robust evidence for a positive influence of unemployment, domestic credit to the private sector and business-friendly regulation on new business formation. Our examination does, however, indicate no support for the view that new business formation significantly reduces national unemployment rates.

Kiel Institute Expert


JEL Classification
J24, M13, O15, J64

Key Words

  • cross-country analysis
  • dynamic panel data analysis
  • new business formation
  • unemployment