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Off to a Bad Start? The Role of Leverage for Start-Up Productivity during the Financial Crisis

Author

Listed:
  • Vincent Sterk

    (University College London)

  • Jasper De Winter

    (De Nederlandsche Bank)

  • Neeltje van Horen

    (Bank of England)

  • Ralph De Haas

    (European Bank for Reconstruction and Dev)

Abstract

We study the channels via which start-ups have contributed to aggregate productivity growth, before and during the financial crisis of 2008. We propose a novel productivity decomposition method, building on Melitz and Polanec (2015), which we apply to administrative micro data on the population of Dutch start-ups. Exploiting detailed balance sheet information, we document striking differences between the contributions of high- and low-leverage start-ups. Moreover, the arrival of the crisis triggered came with a collapse in productivity growth. We interpret these findings through the lens of a firm dynamics model with financial constraints and real adjustment frictions.

Suggested Citation

  • Vincent Sterk & Jasper De Winter & Neeltje van Horen & Ralph De Haas, 2018. "Off to a Bad Start? The Role of Leverage for Start-Up Productivity during the Financial Crisis," 2018 Meeting Papers 201, Society for Economic Dynamics.
    • Handle: RePEc:red:sed018:201
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    References listed on IDEAS

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