Declining Business Dynamism
Jozef Konings and
Gert Bijnens
No 12615, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
We build on Decker et al. (2016) who show that business dynamism and entrepreneurship in the U.S. have declined over recent decades and that the characteristics of this decline changed around 2000. Since 2000 the U.S. decline in dynamism has been accompanied by a decline in high-growth, young firms. Using 30 years of data from all for-profit firms incorporated in Belgium, we now offer evidence that Belgium, a far more rigid economy than the U.S., experienced a similar decline in dynamism. Furthermore, the decline set in around 2000 as well. We attribute this not only to the declining share of young firms that become high-growth firms, but more importantly also to the declining propensity for small (not necessarily young) firms to experience fast growth. We do not yet know what caused this decline. Since there are remarkable similarities between Belgium and the U.S. with respect to the secular decline in business dynamism, global trends rather than country specific changes are most likely to be at the basis of this evolution. A possible global trend causing dynamism to decline, is the ICT revolution that started the second half of the ’90s. We find preliminary indications that industries with higher ICT intensity have experienced a dynamism trend change during that same period and show a steeper dynamism decline.
Keywords: Business dynamism; Entry; High-growth firms (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-ent, nep-ino and nep-sbm
References: Add references at CitEc
Citations: View citations in EconPapers (25)
Downloads: (external link)
https://cepr.org/publications/DP12615 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Working Paper: DECLINING BUSINESS DYNAMISM (2018)
Working Paper: DECLINING BUSINESS DYNAMISM (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:12615
Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP12615
orders@cepr.org
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by (repec@cepr.org).