The Economic Contribution of a Cohort of New Firms Over Time

Alex Coad; Julian S. Frankish; Albert N. Link

doi:10.1007/s11151-020-09777-9

The Economic Contribution of a Cohort of New Firms Over Time

Alex Coad^*, Julian S. Frankish, Albert N. Link

^*Corresponding author for this work

Graduate School of Business and Finance

Research output: Contribution to journal › Article › peer-review

Abstract

What is the economic contribution of a cohort of new entrants? Previous research has investigated this topic but only in passing, and found conflicting results. We analyze a cohort of 6578 firms that entered in 2004, and track them for 10 years with an emphasis on size, which is measured using (deflated) sales data from the entrepreneurs’ bank account records. The overall economic contribution of the cohort decreases in the years after entry. Post-entry growth is not sufficient to offset the economic loss from high exit rates. Broadly similar results are found when disaggregating by firm size and industry.

Original language	English
Pages (from-to)	519-536
Number of pages	18
Journal	Review of Industrial Organization
Volume	57
Issue number	3
DOIs	https://doi.org/10.1007/s11151-020-09777-9
Publication status	Published - 2020 Nov 1

Keywords

Cohort
Entrepreneurship
Firm size
Post-entry growth
Survival

ASJC Scopus subject areas

Economics and Econometrics
Strategy and Management
Organizational Behavior and Human Resource Management
Management of Technology and Innovation

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10.1007/s11151-020-09777-9

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abstract = "What is the economic contribution of a cohort of new entrants? Previous research has investigated this topic but only in passing, and found conflicting results. We analyze a cohort of 6578 firms that entered in 2004, and track them for 10 years with an emphasis on size, which is measured using (deflated) sales data from the entrepreneurs{\textquoteright} bank account records. The overall economic contribution of the cohort decreases in the years after entry. Post-entry growth is not sufficient to offset the economic loss from high exit rates. Broadly similar results are found when disaggregating by firm size and industry.",

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N2 - What is the economic contribution of a cohort of new entrants? Previous research has investigated this topic but only in passing, and found conflicting results. We analyze a cohort of 6578 firms that entered in 2004, and track them for 10 years with an emphasis on size, which is measured using (deflated) sales data from the entrepreneurs’ bank account records. The overall economic contribution of the cohort decreases in the years after entry. Post-entry growth is not sufficient to offset the economic loss from high exit rates. Broadly similar results are found when disaggregating by firm size and industry.

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The Economic Contribution of a Cohort of New Firms Over Time

Abstract

Keywords

ASJC Scopus subject areas

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