Cyclical Fluctuations, Financial Shocks, and the Entry of Fast-Growing Entrepreneurial Startups

Young, restless and creative: Openness to disruption and creative innovations

Christoph Albert and Andrea Caggese

The Review of Financial Studies, 2021, vol. 34, issue 5, 2508-2548

Abstract: We analyze a multiyear, multicountry entrepreneurship survey with more than one million observations to identify startups with low and high growth potential. We confirm the validity of these ex ante measures with ex post firm-level information on employment growth. We find that negative aggregate financial shocks reduce all startup types, but their effect is significantly stronger for startups with high growth potential, especially when GDP growth is low. Our results uncover a new composition of entry channel that significantly reduces employment growth and is potentially important for explaining slow recoveries after financial crises.

JEL-codes: D22 E32 M13 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Working Paper: Cyclical Fluctuations, Financial Shocks, and the Entry of Fast-Growing Entrepreneurial Startups (2019)
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