Business Dynamism in the UK: New Findings Using a Novel Dataset

Silvia Lui (), Russell Black, Josefa Lavandero-Mason and Mohammad Shafat

Economic Statistics Centre of Excellence (ESCoE) Discussion Papers from Economic Statistics Centre of Excellence (ESCoE)

Abstract: We use a novel firm-level dataset to measure employment dynamics of UK businesses from 1999 to 2019, building on microdata from the Inter-Departmental Business Register (IDBR) and administrative data on employment from PAYE records at HMRC. We construct a new quarterly dataset by using consecutive snapshots of the IDBR to deduce signs of activity of firms. We present detailed descriptive analysis showing the quarterly averages for job creation and destruction by size, sector, transition status and age. In addition, we compute the marginal effects of age and size on growth using the Davis, Halitwanger and Schuh (DHS) approach. Our results show that business dynamism has slowed down since the 2008-2009 financial crisis on two levels: firstly, a decline in job destruction and secondly, a decline in job creation due to entry. Age has an important role in UK’s business dynamism – young firms are the most dynamic group of enterprises, independently of size.

Keywords: business dynamism; employment; administrative data (search for similar items in EconPapers)
JEL-codes: C81 D22 L25 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent, nep-eur, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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