As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys

This paper uses a unique data set of panel firms from the World Bank's Enterprise Surveys in 47 economies, to provide estimates of the patterns of firm exit, and analyzes various firm characteristics and conditions under which firms leave the market. Firms' labor productivity and age are r...

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Main Authors:	Aga, Gemechu, Francis, David
Format:	Working Paper
Language:	en_US
Published:	World Bank Group, Washington, DC 2015
Subjects:	business environment firm dynamics productivity growth business entry firm exit business climate jobs job loss
Online Access:	http://hdl.handle.net/10986/21657

id	okr-10986-21657
recordtype	oai_dc
spelling	okr-10986-216572021-04-23T14:04:03Z As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys Aga, Gemechu Francis, David business environment firm dynamics productivity growth business entry firm exit business climate jobs job loss This paper uses a unique data set of panel firms from the World Bank's Enterprise Surveys in 47 economies, to provide estimates of the patterns of firm exit, and analyzes various firm characteristics and conditions under which firms leave the market. Firms' labor productivity and age are robustly associated with a lower likelihood of exit, consistent with conceptions of creative destruction and findings elsewhere in the literature. These findings are robust across several specifications. However, the effects are mitigated by other factors, such as use of bank financing and the presence of limited liability. Although firm size does appear to matter, its effect is lessened after accounting for labor productivity. The paper also provides basic estimates of job loss attributable to firm exit, estimating that on average 3 to 4 percent of private sector employment is lost per annum due to firm exit. Because of the challenges of data collection, the analysis relies on a necessarily conservative definition of exit and provides a framework for future work on utilizing such periodic survey panels to estimate the relative patterns of firm attrition and the associated job loss. 2015-03-31T16:30:50Z 2015-03-31T16:30:50Z 2015-03 Working Paper http://hdl.handle.net/10986/21657 en_US Policy Research Working Paper;No. 7218 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank Group, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	business environment firm dynamics productivity growth business entry firm exit business climate jobs job loss
spellingShingle	business environment firm dynamics productivity growth business entry firm exit business climate jobs job loss Aga, Gemechu Francis, David As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys
relation	Policy Research Working Paper;No. 7218
description	This paper uses a unique data set of panel firms from the World Bank's Enterprise Surveys in 47 economies, to provide estimates of the patterns of firm exit, and analyzes various firm characteristics and conditions under which firms leave the market. Firms' labor productivity and age are robustly associated with a lower likelihood of exit, consistent with conceptions of creative destruction and findings elsewhere in the literature. These findings are robust across several specifications. However, the effects are mitigated by other factors, such as use of bank financing and the presence of limited liability. Although firm size does appear to matter, its effect is lessened after accounting for labor productivity. The paper also provides basic estimates of job loss attributable to firm exit, estimating that on average 3 to 4 percent of private sector employment is lost per annum due to firm exit. Because of the challenges of data collection, the analysis relies on a necessarily conservative definition of exit and provides a framework for future work on utilizing such periodic survey panels to estimate the relative patterns of firm attrition and the associated job loss.
format	Working Paper
author	Aga, Gemechu Francis, David
author_facet	Aga, Gemechu Francis, David
author_sort	Aga, Gemechu
title	As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys
title_short	As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys
title_full	As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys
title_fullStr	As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys
title_full_unstemmed	As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys
title_sort	as the market churns : estimates of firm exit and job loss using the world bank’s enterprise surveys
publisher	World Bank Group, Washington, DC
publishDate	2015
url	http://hdl.handle.net/10986/21657
_version_	1764448899216441344

As the Market Churns : Estimates of Firm Exit and Job Loss Using the World Bank’s Enterprise Surveys

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