Determination of Small Business Churn in Australia
10 Pages Posted: 19 Dec 2011 Last revised: 18 Jan 2012
Date Written: December 17, 2011
Abstract
The annually increasing firm churn has significant financial, legal and social impacts on productivity, employment and economic growth in Australia. However, evidence of the impacts of firm churn is sparse. This paper undertakes a first-ever study that empirically investigates the determinants and their impacts on firm churn. This paper is innovative to the literature in four aspects: (1) Local Region Areas (LGAs) data, rarely available in other countries, has been used for the analysis; (2) using LGAs as the basic analytical unit is able to eliminate the heterogeneity problems encountered by other studies which are based on national and cross-national data; (3) panel data modeling techniques identify robust evidence; (4) systematic statistical tests guarantees the robustness of the results. The dataset, provided by Australia Bureau of Statistics, include 3462 observations of 577 Local Government Areas (LGAs) during 2004-2009. The research identifies variables positively and negatively affecting the churn and finds that size matters in determining business churn. The last section concludes with a discussion of limitations and future research directions.
Keywords: business churn, determinants, panel data, Australia
JEL Classification: D20, G38
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Has the Business Cycle Changed and Why?
By James H. Stock and Mark W. Watson
-
Output Fluctuations in the United States: What Has Changed Since the Early 1980s?
-
Time Varying Structural Vector Autoregressions and Monetary Policy
-
Recent U.S. Macroeconomic Stability: Good Policies, Good Practices, or Good Luck?
By Shaghil Ahmed, Andrew T. Levin, ...
-
On the Causes of the Increased Stability of the U.S. Economy
By James A. Kahn, Margaret Mary Mcconnell, ...
-
The Rise in Firm-Level Volatility: Causes and Consequences
By Diego Comin and Thomas Philippon
-
The Rise in Firm-Level Volatility: Causes and Consequences
By Diego Comin and Thomas Philippon
-
The Rise in Firm-Level Volatility: Causes and Consequences
By Diego A. Comin and Thomas Philippon
-
The Estimation of Prewar Gnp: Methodology and New Evidence
By Nathan S. Balke and Robert J. Gordon