Firm dynamics, persistent effects of entry conditions, and business cycles /
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Author / Creator: | Ferreira Moreira, Sara Patricia, author. |
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Imprint: | 2016. Ann Arbor : ProQuest Dissertations & Theses, 2016 |
Description: | 1 electronic resource (106 pages) |
Language: | English |
Format: | E-Resource Dissertations |
Local Note: | School code: 0330 |
URL for this record: | http://pi.lib.uchicago.edu/1001/cat/bib/11674597 |
Other authors / contributors: | University of Chicago. degree granting institution. |
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ISBN: | 9781339874531 |
Notes: | Advisors: Erik Hurst Committee members: Steve Davis; Ali Hortacsu; Chad Syverson. This item is not available from ProQuest Dissertations & Theses. Dissertation Abstracts International, Volume: 77-12(E), Section: A. English |
Summary: | In my dissertation I examine 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. In order to evaluate the relative importance of these two mechanisms, I build a model of firm dynamics that includes aggregate shocks, idiosyncratic productivity, and a demand accumulation process. When I mute the effects of selection mechanisms, I find that the average initial size differences are more procyclical, but they are less persistent over time. Finally, I use the model to quantitatively evaluate the role of the persistent effects of entry conditions in the propagation of the Great Recession. My current model simulations indicate that the impact of the crisis on the 2008--2009 cohorts reduces aggregate employment by at least one percentage point in the following ten years. |
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