A business-friendly environment in a region leads to more companies being established that have greater economic substance and are more likely to survive. A falling trade tax rate, for example, leads to a higher start-up intensity in the medium and long term.
The relationship between the start-up scene and the start-up-relevant resources is more complex: if unemployment increases in a region, for example, start-up intensity also increases in the short to long term. Conversely, an increase in start-up intensity lowers the unemployment rate and increases prosperity in the region.
These are the key findings of the study "Start-up ecosystems and start-up activity – a long-term analysis of their interrelationships". Researchers at the IfM Bonn have examined the reciprocal influences of institutional framework condi-tions, economic resources, and business foundations at a regional level. This was based on data on business foundations with economic substance and at least three years of market survival in 397 cities and districts in Germany between 2002 and 2018.
