The Relation between Enterprise Population Dynamics and Economic Cycle
Aneta Ptak-Chmielewska

In 2009 in Poland we could observe the effects of global financial crisis translating into an economic slump. Poland, however, was the only European country to achieve positive economic growth. GDP dynamics in our country dropped to the level of 1,8%, inflation rate fell to 3,5% in 2009, and the unemployment rate rose to 11,9%. Demographic rates as basic indicators of enterprise population growth dynamics serve as a measure that is ahead of changes in economic cycle. This is due to their dependence on changes in macroeconomic factors (GDP, Inflation, Unemployment). For European countries the strongest correlation was recorded for the ‘death’ rate and unemployment rate in 2005 (i.e. with an anticipation effect) and the unemployment rate in 2007 and enterprise population dynamics (defined as: difference between ‘birth’ rate and ‘death’ rate). A significant interdependence was identified between the birth rate and real GDP from 2007 i.e. without an anticipation effect or delay. GDP growth stimulates establishing new business entities. The relationship between demographic rates for enterprise population and inflation is the strongest for enterprise dynamics (difference between the birth rate and death rate) and the inflation rate from 2005. However, this interdependence is weaker than in previous cases. For Poland a direct interrelationship between enterprise population dynamics and the unemployment level cannot be identified for certain. A more salient negative interdependence may be noticed between unemployment and enterprise retention measured by a total of birth and death rates. High unemployment, in turn, might encourage entrepreneurs to set up new companies. After a period of high unemployment labour market absorbs self-employed people leading to an increased enterprise retention and a decline in unemployment in the subsequent years. Those findings confirm Schumpeter’s theory of creative destruction. Enterprise population dynamics is significantly dependent of GDP value. The evaluation of long-term interdependences at macroeconomic level is impeded due to a short observation period. Neither do the results for other countries confirm relationships between basic macroeconomic and measures and demographic indicators.

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