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Has the Swedish Business Sector Become More Entrepreneurial than the US Business Sector?

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  • Persson, Lars
  • Heyman, Fredrik
  • Norbäck, Pehr-Johan
Abstract
Recent studies document a 30-year decline in various measures of entrepreneurship in the U.S. Using detailed Swedish employer-employee data over the period 1990 to 2013, we find young firms to be more prominent in the Swedish business sector than in the U.S. business sector. Young Swedish firms, aged five years or less, account for more than half of all firms during this period. We also observe an increase in Swedish entrepreneurial activity for start-ups. However, increasing job destruction rates for young firms has implied a declining employment share for younger firms from the mid-2000s. Moreover, most of the job creation by young firms occurs in the expanding service sector. We discuss different explanations for why Sweden appears not to have the same strong decline in entrepreneurial activity as the U.S. has had during the last two decades. We argue that one important explanation is economic reforms in Sweden in the 1990s that mitigated several hurdles to entrepreneurship.

Suggested Citation

  • Persson, Lars & Heyman, Fredrik & Norbäck, Pehr-Johan, 2019. "Has the Swedish Business Sector Become More Entrepreneurial than the US Business Sector?," CEPR Discussion Papers 13683, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13683
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    Cited by:

    1. Naudé, Wim, 2020. "From the Entrepreneurial to the Ossified Economy: Evidence, Explanations and a New Perspective," GLO Discussion Paper Series 539, Global Labor Organization (GLO).
    2. Henrekson Magnus, 2017. "Taxation of Swedish Firm Owners: The Great Reversal from the 1970s to the 2010s," Nordic Tax Journal, Sciendo, vol. 2017(1), pages 26-46, January.
    3. Coad, Alex & Karlsson, Johan, 2022. "A field guide for gazelle hunters: Small, old firms are unlikely to become high-growth firms," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    4. Niklas Elert & Magnus Henrekson, 2019. "The collaborative innovation bloc: A new mission for Austrian economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(4), pages 295-320, December.
    5. Francisca Sempere-Ripoll & Sofia Estelles-Miguel & Ronald Rojas-Alvarado & Jose-Luis Hervas-Oliver, 2020. "Does Technological Innovation Drive Corporate Sustainability? Empirical Evidence for the European Financial Industry in Catching-Up and Central and Eastern Europe Countries," Sustainability, MDPI, vol. 12(6), pages 1-19, March.
    6. Criaco, Giuseppe & van Oosterhout, J. (Hans) & Nordqvist, Mattias, 2021. "Is blood always thicker than water? Family firm parents, kinship ties, and the survival of spawns," Journal of Business Venturing, Elsevier, vol. 36(6).
    7. Niklas Elert & Dan Johansson & Mikael Stenkula & Niklas Wykman, 2023. "The evolution of owner-entrepreneurs’ taxation: five tax regimes over a 160-year period," Journal of Evolutionary Economics, Springer, vol. 33(2), pages 517-540, April.
    8. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2021. "Automation, Work and Productivity: The Role of Firm Heterogeneity," Working Paper Series 1382, Research Institute of Industrial Economics, revised 09 Mar 2023.

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    More about this item

    Keywords

    entrepreneurship; Job dynamics; Matched employer-employee data; Industrial structure and structural change;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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