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Coping with high decline: firms’ resilience to adversity

Silviano Esteve-Pérez (), Fabio Pieri () and Diego Rodriguez ()
Authors registered in the RePEc Author Service: Silviano Esteve-Pérez ()

No 2021/08, DEM Working Papers from Department of Economics and Management

Abstract: This work investigates the factors that precipitate a firm’s sudden decline, which is defined as a short-term heavy contraction in firm size, and examines firms’ performance in the aftermath of a high-decline (HD) event. The empirical analysis reveals patterns of HD events over the business cycle and across markets, providing insights into the factors that enable firms’ resilience in terms of better growth performance after an HD event. Firms that upgrade their production processes and invest in human capital show better growth trajectories in the aftermath of an HD event.

Keywords: high-decline events; business cycle; resilience; growth trajectories (search for similar items in EconPapers)
JEL-codes: D22 D23 L25 L60 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ent
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