scholarly journals Firm Entry and Exit during Recessions

2021 ◽  
Author(s):  
João Ayres ◽  
Gajendran Raveendranathan
Keyword(s):  
Great Recession ◽  
Firm Dynamics ◽  
Firm Entry ◽  
Entry And Exit ◽  
Young Firms ◽  
Collateral Constraint ◽  
The Great Recession ◽  
Productivity Shock ◽  
Quantitative Results ◽  
Firm Entry And Exit

We analyze shocks to productivity, collateral constraint (credit shock), firm operation, and labor disutility in a model of firm dynamics with entry and exit. Shocks to firm operation and labor disutility capture COVID-19 lockdowns. Compared to the productivity shock, the credit and the lockdown shocks generate larger changes in firm entry and exit. The credit shock accounts for lower entry, higher exit, and concentration of exit among young firms during the Great Recession. The lockdown shocks predict a large fall in entry and rise in exit followed by a sharp rebound. In both recessions, changes in entry and exit account for 10-20 percent of the fall in output and hours. Finally, we discuss how the modeling of potential entrants matters for the quantitative results.

scholarly journals Entry, Exit, Firm Dynamics, and Aggregate Fluctuations

2016 ◽  
Vol 8 (3) ◽  
pp. 1-41 ◽  
Author(s):  
Gian Luca Clementi ◽  
Berardino Palazzo
Keyword(s):  
Firm Dynamics ◽  
Causal Link ◽  
Entry And Exit ◽  
Aggregate Fluctuations ◽  
Slow Recovery ◽  
Aggregate Shocks ◽  
The Great Recession ◽  
The Common ◽  
Aggregate Dynamics ◽  
Firm Entry And Exit

Firm entry and exit amplify and propagate the effects of aggregate shocks, leading to greater persistence and unconditional variation of aggregate quantities. Following a positive aggregate shock, entry rises. As in the data, entrants are small and their initial impact on aggregate dynamics is negligible. However, as the common productivity component reverts to its unconditional mean, the youngsters that survive grow larger, generating a wider and longer expansion than in a scenario without entry or exit. The model also identifies a causal link between the drop in establishments at the outset of the Great Recession and the subsequent slow recovery. (JEL D21, D92, E22, E24, E32, G31, L11)

scholarly journals Environmental Regulation and Exports: Evidence from the Comprehensive Air Pollution Policy in China

2021 ◽  
Vol 18 (3) ◽  
pp. 1316 ◽  
Author(s):  
Hong Chen ◽  
Yang Xu
Keyword(s):  
Air Pollution ◽  
Environmental Regulation ◽  
Pollution Prevention ◽  
Firm Entry ◽  
Entry And Exit ◽  
Control Plan ◽  
Heterogeneous Effects ◽  
The Impact ◽  
The City ◽  
Firm Entry And Exit

The impact of environmental regulation has been an important topic. Based on the Chinese Custom Database and China City Statistical Yearbook, this paper investigates the effect of environmental regulation on export values and explores potential mechanisms and heterogeneous effects. Taking advantage of China’s first comprehensive air pollution prevention and control plan, the Air Pollution Control in Key Zones policy, as a quasi-natural experiment, we employ the difference-in-differences method to examine the causal relationship between environmental regulation and exports. We find the statistically significant and negative effect of environmental regulation on exports at the city level. Moreover, we find that the potential mechanism is the change in export values caused by firm entry and exit, especially by exiters, rather than the change in the number of exporting firms in the city caused by firm entry and exit. In addition, we find the heterogeneous effects of environmental regulation based on the differences of environmental policy across cities and the Broad Economic Categories classification.

scholarly journals Firm entry and exit during a crisis period: Evidence from Russian regions

2016 ◽  
Vol 2 (2) ◽  
pp. 162-191 ◽  
Author(s):  
Ichiro Iwasaki ◽  
Mathilde Maurel ◽  
Bogdan Meunier
Keyword(s):  
Firm Entry ◽  
Russian Regions ◽  
Entry And Exit ◽  
Crisis Period ◽  
Firm Entry And Exit

Aggregate Recruiting Intensity

2018 ◽  
Vol 108 (8) ◽  
pp. 2088-2127 ◽  
Author(s):  
Alessandro Gavazza ◽  
Simon Mongey ◽  
Giovanni L. Violante
Keyword(s):  
Labor Market ◽  
Great Recession ◽  
Equilibrium Model ◽  
Random Search ◽  
Firm Dynamics ◽  
Hiring Decisions ◽  
Aggregate Shocks ◽  
Fast Growing ◽  
The Great Recession ◽  
Matching Efficiency

We develop an equilibrium model of firm dynamics with random search in the labor market where hiring firms exert recruiting effort by spending resources to fill vacancies faster. Consistent with microevidence, fast-growing firms invest more in recruiting activities and achieve higher job-filling rates. These hiring decisions of firms aggregate into an index of economy-wide recruiting intensity. We study how aggregate shocks transmit to recruiting intensity, and whether this channel can account for the dynamics of aggregate matching efficiency during the Great Recession. Productivity and financial shocks lead to sizable procyclical fluctuations in matching efficiency through recruiting effort. Quantitatively, the main mechanism is that firms attain their employment targets by adjusting their recruiting effort in response to movements in labor market slackness. (JEL D22, E24, E32, J23, J41, J63, M51)

scholarly journals Firm entry and exit during recessions

2021 ◽  
Author(s):  
Joao Ayres ◽  
Gajendran Raveendranathan
Keyword(s):  
Firm Entry ◽  
Entry And Exit ◽  
Firm Entry And Exit

scholarly journals The Effect of Trade Liberalization on Firm Entry and Exit in Punjab, Pakistan

2014 ◽  
Vol 19 (1) ◽  
pp. 67-89
Author(s):  
Marjan Nasir
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Trade Liberalization ◽  
Manufacturing Sector ◽  
Firm Entry ◽  
Entry And Exit ◽  
Export Industries ◽  
The Impact ◽  
Firm Entry And Exit ◽  
Exchange Rate Depreciation

This study focuses on the impact of trade liberalization on firm entry and exit in Punjab’s export manufacturing sector over the decade 2001–10. As far as the province’s export industries are concerned, real exchange rate depreciation attracts new firms but also leads weaker firms to exit. A reduction in local or international tariffs, however, has no significant impact on firm entry or exit.

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