Business Creation During Covid-19

31 Pages Posted: 8 Jun 2022

See all articles by Saleem Bahaj

Saleem Bahaj

UCL Economics

Sophie Piton

Bank of England

Anthony Savagar

University of Kent - Department of Economics

Date Written: May 20, 2022


We use data on business registrations in the UK to study the response of firm entry to the Covid-19 pandemic. We find that firm entry increased during the pandemic, unlike typical recessions where firm entry declines. The rise in firm creation is driven by individual entrepreneurs creating companies for the first time, and particularly creating companies in online retail. We link the rise in firm creation to declines in brick-and-mortar retail footfall via Google mobility data, and show that it takes 10 weeks for a firm to be registered after a shock to footfall. To study the impacts of the newly created firms, we merge entry data with online job postings from Indeed and show that the rise in firm creation drives increased vacancy postings. However, we also show there is a higher probability of pandemic startups dissolving relative to pre-pandemic cohorts. Therefore, we conclude that booming firm creation aided the rapid recovery of the UK economy in the short run, but the long-run implications are more uncertain.

Keywords: Firm dynamics, Covid-19, business dynamism, firm entry.

JEL Classification: E32, L25, L26.

Suggested Citation

Bahaj, Saleem and Piton, Sophie and Savagar, Anthony, Business Creation During Covid-19 (May 20, 2022). Bank of England Working Paper 981, Available at SSRN: or

Saleem Bahaj (Contact Author)

UCL Economics ( email )

30 Gordon Street
London, England WC1H 0AX
United Kingdom

Sophie Piton

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

HOME PAGE: http://

Anthony Savagar

University of Kent - Department of Economics ( email )

Keynes College
Kent, CT2 7NP
United Kingdom

HOME PAGE: http://

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics