Small firm births and macroeconomic fluctuations

✍ Scribed by José Mata

• Book ID: 104647840
• Publisher: Springer US
• Year: 1996
• Tongue: English
• Weight: 671 KB
• Volume: 11
• Category: Article
• ISSN: 0889-938X
• DOI: 10.1007/bf00157665

✦ Synopsis

Using different definitions of what constitutes a small firm, this paper analyses the effect of business conditions on the start-up of small firms. It is found that small firm births exhibit a pro-cyclical hehaviour, irrespective of the threshold used to define a small firm. The smallest new firms, however, seem to be less responsive to the opportunity cost of capital. Finally, no relationship was found between entry of small firms and industry growth and profiability.