Employee Spinoffs and Other Entrants: Stylized Facts from Brazil

Oana Hirakawa, Marc-Andreas Muendler and James Rauch

No 15638, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a comprehensive linked employer-employee database from Brazil for the period 1995-2001, we are able for the first time to compare firms founded as employee spinoffs to new firms without parents and to diversification ventures of existing firms entering a new industry. Employee spinoffs are defined either as the director/manager having moved from a parent in the same industry or as one-quarter of the employees having shifted from a common parent. Depending on definition, employee spinoffs account for between one-sixth and one-third of the new firms in Brazil's private sector during this period. Regardless of definition, size at entry is larger for employee spinoffs than for new firms without parents but smaller than for diversification ventures of existing firms. Similarly, exit rates for employee spinoffs are less than for new firms without parents and comparable to those for diversification ventures of existing firms. These results suggest that we can think of some part of a firm's productivity draw in the Jovanovic (1982) model as embodied in the firm's employees and portable by them to a new firm.

JEL-codes: J21 L25 L26 (search for similar items in EconPapers)
Date: 2010-01
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Published as Marc Muendler, James E. Rauch, and Oana Tocoian,"Employee Spinoffs and Other Entrants: Stylized Facts from Brazil," International Journal of Industrial Organization 30 (September 2012): 447-458.

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Journal Article: Employee spinoffs and other entrants: Stylized facts from Brazil (2012)
Working Paper: Employee spinoffs and other entrants: stylized facts from Brazil (2010)
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