Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1147: Large Scope Business Sector Reforms: Has the Swedish Business Sector Become More Entrepreneurial than the U.S. Business Sector?

Fredrik Andersson , Fredrik Heyman (), Pehr-Johan Norbäck () and Lars Persson ()
Additional contact information
Fredrik Andersson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Fredrik Heyman: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Pehr-Johan Norbäck: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Lars Persson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: Recent studies document a 30-year decline in various measures of entrepreneurship in the United States. In contrast, using detailed Swedish employer-employee data over the period 1990–2013, we find no decline in Swedish entrepreneurial activity. Aggregate net job creation is greatest among the youngest firms in the Swedish business sector. Moreover, most of the net job creation by young firms takes place in the expanding service sector. We argue that a key explanation for the high entrepreneurial activity in the Swedish business sector during the last two decades stems from economic reforms in the 1990s that mitigated several hurdles to entrepreneurship.

Keywords: Entrepreneurship; Job dynamics; Matched employer-employee data; Industrial structure and structural change

JEL-codes: J23; K23; L26; L51

36 pages, December 21, 2016

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