Young Firms, Old Capital

Song Ma, Justin Murfin and Ryan D. Pratt

No 29189, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Across a broad range of equipment types and industries, we document a pattern of local capital reallocation from older firms to younger firms. Start-ups purchase a disproportionate share of old physical capital previously owned by more mature firms. The evidence is consistent with financial constraints driving differential demand for vintage capital. The local supply of used capital influences start-up entry, job creation, investment choices, and growth, particularly when capital is immobile. Conversely, incumbents accelerate capital replacement in the presence of more young firms. The evidence suggests previously undocumented benefits to co-location between old and young firms.

JEL-codes: G3 L2 R1 R4 (search for similar items in EconPapers)
Date: 2021-08
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-fdg, nep-isf and nep-sbm
Note: CF IO PR
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published as Song Ma & Justin Murfin & Ryan Pratt, 2021. "Young firms, old capital," Journal of Financial Economics, .

Downloads: (external link)
http://www.nber.org/papers/w29189.pdf (application/pdf)

Related works:
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:nbr:nberwo:29189

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w29189

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().