Staying Power: What Influences Micro-firm Survival in Tourism?

Abstract

The purpose of this paper is to investigate how previous experience and location of entrepreneurs influence the survival of new tourism firms. The paper departs from recent evolutionary economic geography advancements, highlighting the importance of routines and skills as well as location-specific knowledge for firm success. While having been well-researched for manufacturing industries characterized by high entry barriers, little knowledge is currently available on the factors influencing survival rates in service sectors with low entry barriers. A quantitative approach applies hazard models to investigate the survival rates over a seven-year period of a total of 133 new micro-tourism firms started between 1999 and 2001 in the four northernmost counties of Sweden. The geo-referenced micro-database ASTRID links information on firm features (e.g. firm births and deaths, spatial coordinates and industry codes) to characteristics of entrepreneurs (e.g. age, education, previous experience). The main finding is that entrepreneurs with previous work experience in related sectors are more likely to survive and, in this case, entrepreneurs without local experience tend to be less successful. We find no evidence that new firms operating in regions specialized in tourism have a survival advantage. Our analysis also indicates that surviving firms improve performance over time. The paper thus contributes new knowledge on the determinants of micro-firm survival in tourism.     

Localized mobility clusters: impacts of labour market externalities on firm performance

This article analyses the impact of labour market-induced externalitieson firm performance by using a unique database that connectsattributes of individuals to workplaces for the entire Swedisheconomy. Based on the analysis of 256,985 workplaces, our resultsshow that firms belonging to networks of local job mobility(i.e. ‘localized mobility clusters’) significantlyoutperform other similar firms within the local labour market.The results also indicate that concentrations of similar andrelated firms do not explain any considerable part of the variationsin firm competitiveness. Labour market externalities derivedvia local job mobility produce significantly more powerful effectsfor the involved firms as compared to the degree of co-location,diversity and scale.     

An analytically solvable core-periphery model

We develop an analytically solvable version of the central modelof ‘new economic geography’, the so called core-peripherymodel by Krugman. While the modified model reproduces all theappealing features of the original one, it also allows us toobtain additional analytical results that are out of reach inKrugman's set-up. First, we are able to assess the exact numberof equilibria and their global stability properties. Second,we are able to investigate the implications of exogenous asymmetriesbetween countries. This is achieved by introducing heterogeneitybetween high-skill mobile and low-skill immobile workers, whichmay also be an empirically attractive property.     

Employment growth and regional development: industrial change and contextual differences between Denmark and Sweden

This paper explores the potential drivers behind uneven regional development in the context of employment growth in Denmark and Sweden. In particular, we are interested in the roles of urbanization, industrial change and the rise of the new economy as manifested in the growth of the two economies in 2002–2007. The aim of this paper is, therefore, to analyse the impact of a number of key industrial sectors on regional employment growth in the two countries. The empirical analysis is based on longitudinal matched employer–employee data retrieved from official registers in each economy from 2002 to 2007, a period of strong national growth following the crisis of early 2000. Our findings indicate that the two economies follow a similar pattern in addressing total employment growth; but looking at changes in employment levels across the national borders of these two relatively similar open economies, we find that, although in general these economies react relatively similarly to changes, embarking on a narrower analysis of the individual sectors reveals marked national differences. This indicates that context matters in the analysis of regional economic dynamics in terms of structure, system and policy.     

THE ALTERNATIVE

Information agencies set up for business-friendly opinion moulding in Sweden worked actively with similar organizations in the Nordic countries to formulate a pro-business ideological programme after the Second World War. The intent of this so called ‘Alternative’ was to counteract social democratic ideas of a more state-planned economy. This article contributes to earlier research on how business interest associations in corporatist countries responded to the development of the welfare state in the Keynesian era. Over time, the programme became less about taking an ideological stance in defence of free enterprise and more about dealing with the economic consequences of record growth. Business involvement in cartelization proved difficult to combine with arguments for free competition, free markets, and non-regulated prices. Collaboration as well as new institutions for both formal and informal discussions between labour and capital during the 1950s and 1960s, at least in Sweden, seems to have reduced the sense of urgency for an ideological programme for business. In the end, no Nordic business programme was ever realized.