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The Economic Contribution of a Cohort of New Firms Over Time

Author

Listed:
  • Alex Coad

    (Waseda University)

  • Julian S. Frankish

    (Barclays Bank)

  • Albert N. Link

    (University of North Carolina at Greensboro)

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.

Suggested Citation

  • Alex Coad & Julian S. Frankish & Albert N. Link, 2020. "The Economic Contribution of a Cohort of New Firms Over Time," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 519-536, November.
    • Handle: RePEc:kap:revind:v:57:y:2020:i:3:d:10.1007_s11151-020-09777-9
    DOI: 10.1007/s11151-020-09777-9
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    References listed on IDEAS

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    More about this item

    Keywords

    Cohort; Firm size; Post-entry growth; Survival; Entrepreneurship;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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