Cyclical Patterns of Business Entry and Exit Dynamics in the US Economy

70 Pages Posted: 23 Nov 2015

See all articles by Can Tian

Can Tian

Shanghai University of Finance and Economics - School of Economics

Date Written: November 9, 2015

Abstract

This paper documents the cyclical patterns of business entry and exit dynamism in the US using the Business Dynamic Statistics (BDS) dataset. The main finding is that, for both firms and establishments, the entry margin is significantly procyclical while the exit margin shows little cyclicality. In addition to the entry and exit rates, the numbers and relative sizes of entering and exiting businesses exhibit similar patterns over the business cycles. I then examine the roles of size, age, and sector in shaping the observed cyclicality, or lack thereof, and find significant variation across different groups.

Keywords: Entry and exit, Firm/establishment size and age, Business cycles

JEL Classification: E23, E32, L11, L60

Suggested Citation

Tian, Can, Cyclical Patterns of Business Entry and Exit Dynamics in the US Economy (November 9, 2015). Available at SSRN: https://ssrn.com/abstract=2694275 or http://dx.doi.org/10.2139/ssrn.2694275

Can Tian (Contact Author)

Shanghai University of Finance and Economics - School of Economics ( email )

777 Guoding Road
Shanghai, 200433
China

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