Job Generation among Independent West German Manufacturing Firms 1974–1980—Evidence from Four Regions

This paper provides a West German contribution, with the use of firm-level data, to the emergent international ‘job-generation’ or ‘employment-accounts’ literature. The basic question is about the relationship between firm-size and employment-change, the central hypothesis being that smaller firms generate more new jobs faster than larger firms do. The findings are limited in their interpretation by data-base and methodological constraints. Within these constraints, they tend to confirm the higher job-generation performance of smaller firms. Further analysis, however, shows that it is not so much the size of a firm as its age which ‘makes’ a smaller firm grow. The paper also shows that there are substantial differences in job-generation behaviour between the four localities under study, differences which are not explained by the three factors of age, size, and sectoral affiliations of firms.