Bursting into life: firm growth and growth persistence by age

Sammanfattning

Is firm growth more persistent for young or old firms? Theory gives us no clear guidance, and previous empirical investigations have been hampered by a lack of detailed data on firm age, as well as a non-representative coverage of young firms. We overcome these shortcomings using a rich dataset on all limited liability firms in Sweden during 1998–2008, covering firms of all ages and information on registered start year. Sales growth for new ventures is characterized by positive persistence, which quickly turns negative as firms get older. Young firms are more likely to have two consecutive periods of positive growth. While new firms experience an early burst of sustained growth, older firms have more erratic growth paths.
Related content: Working Paper No. 264

Liknande innehåll

Do gender norms travel within corporations? The impact of foreign subsidiaries on the home country’s gender wage gap

Artikel (med peer review)Publikation

Halvarsson, D., Lark, O., Tingvall, P. G., Vahter, P., & Videnord, J.

Publiceringsår

2023

Publicerat i

Applied Economics Letters, 1-5.

Sammanfattning

In this note we study how the share of workers in a corporation located in a high gender wage gap country impacts the wage gap in their home country operations. Our findings support the hypothesis that firms with strong intra-firm linkages to a high gender wage gap country also display a relatively large gender wage gap at home.

Ratio Working Paper No 363: City Size, Employer Concentration, and Wage Income Inequality

Working paperPublikation

Korpi, M., & Halvarsson, D.

Ladda ner

Publiceringsår

2023

Publicerat i

Rati Working Paper Series.

Sammanfattning

In this paper, we build upon a monopsony framework, suggested by Card et. al. 2016, which links firm level productivity and rent-sharing to wage inequality. Specifically, our research questions address i) to which extent labor market concentration across firms (within different types of locally situated industries) affects variation in wages among workers within these firms and industries, and ii) how this variation in turn spills over into economy-wide inequality (measured at the level of local labor markets). Using linked employer-employee full population data for Sweden, and an AKM modelling framework to separate between worker- and firm-level heterogeneity, our results suggest that higher firm-level fixed effects (a measure of rent-sharing) is associated with lower labor market employer concentration, something which affects average wage income among firms accordingly. Addressing wage income inequality by applying our model to different segments of the local labor market income distribution, we find that reduced average employer concentration in larger cities accounts for almost all variation in the (positive) link between city size-and wage inequality, except for the largest metropolises where it captures around 30-50 percent of variation depending on the income segment that we focus on.

Amundsen versus Scott: are growth paths related to firm performance?

Artikel (med peer review)Publikation

Coad, A., Daunfeldt, SO. & Halvarsson, D.

Publiceringsår

2022

Publicerat i

Small Business Economics 59, 593–610 (2022).

Sammanfattning

In the race to the South Pole, Roald Amundsen’s expedition covered an equal distance each day, irrespective of weather conditions, while Scott’s pace was erratic. Amundsen won the race and returned without loss of life, while Scott and his men died. In the context of firm growth, the Amundsen hypothesis suggests that smoother growth paths are associated with better performance in subsequent periods. We develop a new method to investigate how firms’ sales growth deviates from their long-run average growth path. Our baseline results suggest that growth path volatility is associated with higher growth of sales and profits, but also with higher exit rates. However, this result is driven by firms with negative growth rates. For positive-growth firms, volatility is negatively associated with both sales growth and survival, providing nuanced support for the Amundsen hypothesis.

The article can be accessed here.

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