Firm Dynamics, Persistent Effects of Entry Conditions, and Business Cycles

Sara Moreira

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: This paper examines how the state of the economy when businesses begin operations affects their size and performance over the lifecycle. Using micro-level data that covers the entire universe of businesses operating in the U.S. since the late 1970s, I provide new evidence that businesses born in downturns start on a smaller scale and remain smaller over their entire lifecycle. In fact, I find no evidence that these differences attenuate even long after entry. Using new data on the productivity and composition of startup businesses, I show that this persistence is related to selection at entry and demand-side channels.

Pages: 76 pages
Date: 2017-01
New Economics Papers: this item is included in nep-bec, nep-mac and nep-sbm
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Citations: View citations in EconPapers (15)

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https://www2.census.gov/ces/wp/2017/CES-WP-17-29.pdf First version, 2017 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:17-29

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