than 20 percent by approximately 2.3 to 4.3 and 2.9 to 3.6 percentage points, on average. A 10 percent increase in TFP, by contrast, increased the probability to be a _Gazelle_ by 3 percentage points. These findings, once more, highlight the importance of small, young, productive firms for the creation of new jobs in the EU 11 economies.

**Surveyed firms in manufacturing were most severely affected by the economic downturn and were the least likely to be high-growth firms in the years after the global financial crisis** (Table 6). In contrast, the probability of becoming a _Gazelle_ among the surveyed firms in farming and fishing was not significantly affected by the economic crisis. Fast-growing firms in these sectors, however, comprised a very small portion of the high-growth firms in the EU11, given the small size of the agricultural and fishing industries. Firms operating in the construction sector also exhibited a relatively high probability of being high-growing firms. Coupled with the firm-growth results from above (i.e. that on average, firms in this sector performed relatively poor during the financial crisis), the regression results suggest that only the top-performing firms in the construction sector were able to grow very fast. One driving force for this result might be an increase in public demand for construction activities induced by governmental investment and EU-supported programs that aimed to mitigate the negative employment effects of the financial crisis.

**After 2008, barriers for doing business depressed the likelihood that a firm would grow fast** . A one unit decrease in the overall institutional barriers perceived by the surveyed EU11 firms was associated with a 0.5 percentage point increase in the probability to be a high-growth firm (Table 6, column 2). Similar qualitative and quantitative effects were obtained for institutional regulations, access to finance, crime, corruption and labor regulations.<sup>26</sup>

# Conclusions

The analysis of the industry- and firm-specific determinants of the job creation process in the EU11 economies relied on a dataset of surviving firms during 2002-2009.<sup>27</sup> To unveil the structural drivers of employment growth in the sampled firms and to assess the role of an adverse macroeconomic shock, it examined the process in two periods–before and after the start of the global financial crisis.

The main results indicate that during the boom years prior to the global financial crisis, traditional industries such as agriculture and fishing, mining, construction and manufacturing were crucial for

> 26 The impact of tax related barriers for doing business on the high-growth probability was positive. Accordingly, more severe perceived tax regulations were associated with an increase in the probability to grow very fast. This effect, however, turns out to be negative and significant, when excluding both Bulgaria and Romania.

> 27 It is important to note that the data used in the analysis presented here relate only to surviving (small and young) firms. A proper understanding of business entry and business exit in the EU11 economies would be essential in order to tailor policies that most successfully contribute to overall job creation. The availability of firm census data for the EU11 economies should, for the future, allow for providing a comprehensive picture on job creation in these countries.

15