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Did US Business Dynamism Recover in the 2010s?

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Abstract

We provide evidence that both firm and establishment entry rates in the US have been increasing over the past decade, seemingly ending the secular decline observed over previous decades. However, the job-size of new businesses relative to incumbents has decreased substantially. Controlling for these opposite trends reveals that the size-adjusted entry rate continues to decline.

Suggested Citation

  • Asier Aguilera-Bravo & Miguel Casares & Hashmat Khan, 2021. "Did US Business Dynamism Recover in the 2010s?," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 2105, Departamento de Economía - Universidad Pública de Navarra.
    • Handle: RePEc:nav:ecupna:2105
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    1. Eleanor J. Choi & James R. Spletzer, 2012. "The Declining Average Size of Establishments: Evidence and Explanations," Working Papers 452, U.S. Bureau of Labor Statistics.
    2. Ryan A. Decker & John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2020. "Changing Business Dynamism and Productivity: Shocks versus Responsiveness," American Economic Review, American Economic Association, vol. 110(12), pages 3952-3990, December.
    3. Christopher Goetz & Henry Hyatt & Erika McEntarfer & Kristin Sandusky, 2016. "The Promise and Potential of Linked Employer-Employee Data for Entrepreneurship Research," NBER Chapters, in: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, pages 433-462, National Bureau of Economic Research, Inc.
    4. Decker, Ryan A. & Haltiwanger, John & Jarmin, Ron S. & Miranda, Javier, 2016. "Where has all the skewness gone? The decline in high-growth (young) firms in the U.S," European Economic Review, Elsevier, vol. 86(C), pages 4-23.
    5. Ufuk Akcigit & Sina T. Ates, 2021. "Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 257-298, January.
    6. Ryan A. Decker & John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2016. "Declining Business Dynamism: What We Know and the Way Forward," American Economic Review, American Economic Association, vol. 106(5), pages 203-207, May.
    7. Flavio Calvino & Chiara Criscuolo & Rudy Verlhac, 2020. "Declining business dynamism: Structural and policy determinants," OECD Science, Technology and Industry Policy Papers 94, OECD Publishing.
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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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