Title: The life cycle of new firms and its impact on job creation and job destruction
Authors: Konings, Joep
Roodhooft, Filip
Van de Gucht, Linda
Issue Date: 1996
Publisher: K.U.Leuven - Departement toegepaste economische wetenschappen
Series Title: DTEW Research Report 09669 pages:1-34
Abstract: This paper examines the post-entry performance of new firms and their impact on job creation and job destruction in the Belgian economy. We use a unique longitudinal data set drawn from the published annual accounts for the period 1985-1994. Our main conclusions can be summarized as follows:(a) The exit increases over the first three years of a firm's life and stabilizes afterwards.(b) Firms with a small initial size have a lower exit probability than firms with a large initial size.© Firms operating in turbulent sectors experience a higher exit probability than firms operating in sectors with low turbulence.(d) Over the period 1985-1994, Belgian firms created on average 7,7% new jobs, while 7,2% existing jobs were destroyed. New firms create 26% of all new jobs. Firm exit accounts for 25% of all job destruction.(e) Small firms create disproportionately more jobs compared to large firms.
Publication status: published
KU Leuven publication type: IR
Appears in Collections:Research Center Finance, Leuven
Research Center of Monetary and Information Economics, Leuven
Research Center Accountancy, Leuven

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