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Firm size and business cycles

Author

Listed:
  • Tulio A. Cravo

    (Inter-American Development Bank, USA)

Abstract

The discussion on how economic activity affects employment in large and small businesses is critical for the formulation of labor policies, especially during recessions. Knowing how firm size is related to job creation and job destruction is important to design effective policies aimed at dampening employment fluctuations. Recent evidence for developed countries indicates that large firms are proportionately more sensitive to cycles than small firms; however, this pattern is not confirmed for periods of credit constraint or in a developing country context, where small businesses might be more sensitive due to more extreme credit constraints.

Suggested Citation

  • Tulio A. Cravo, 2017. "Firm size and business cycles," IZA World of Labor, Institute of Labor Economics (IZA), pages 371-371, June.
    • Handle: RePEc:iza:izawol:journl:2017:n:371
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    References listed on IDEAS

    as
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    6. Teresa C Fort & John Haltiwanger & Ron S Jarmin & Javier Miranda, 2013. "How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 520-559, August.
    7. Giuseppe Moscarini & Fabien Postel-Vinay, 2012. "The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment," American Economic Review, American Economic Association, vol. 102(6), pages 2509-2539, October.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    job flows; firm size; business cycles;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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