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Does Business Cycle Have an Impact on Entrants and Exits?

Author

Listed:
  • Nikolay Sterev

    (Industrial Business Department, Business Faculty, UNWE, Sofia, Bulgaria)

  • Diana Kopeva

    (Economics of Natural Resources Department, Business Faculty, UNWE, Sofia, Bulgaria)

  • Dimitar Blagoev

    (Industrial Business Department, Business Faculty, UNWE, Sofia, Bulgaria)

Abstract

Purpose: The role of entrants and exits has enlarged indisputably over recent years. The basic explanation is connected to the deepening of innovation's influence on industrial growth. Furthermore, new businesses have to be more effective, and based on products, technological or organizational innovations, and exits have to be ineffective (respectively unprofitable), based on denoted products or technology. Design/methodology/approach: According to the above-mentioned prerequisites, policymakers need to manage the role (respectively the impact) that entrants (new start-up companies) and exits play in industrial growth. Nevertheless, this impact is not a cornerstone of the Bulgarian National Strategy, or the Europe 2020 Strategy. Findings: The paper tries to answer the following two questions: 1) Do new start-up companies and exits have any role and influence on economic growth in Bulgaria? and 2) Does the role (respectively the impact) of entrants and exits in industrial growth change according to economic cycle? Research limitations/implications: In addition, according to the Lisbon Strategy, as well as the European Union's (EU) Strategy 2020, the current economic policy supports entrepreneurship and innovations. Thus, the establishment of innovative companies, as well as the development of innovative, incumbent business are core issues of EU economic policy for the past decade. Originality/value: The paper builds on the industrial dynamic methodology and on the understanding of how business decisions (entrepreneurship, innovations, and R&D) on micro level correspond to macro level (GDP growth and innovation policy).

Suggested Citation

  • Nikolay Sterev & Diana Kopeva & Dimitar Blagoev, 2017. "Does Business Cycle Have an Impact on Entrants and Exits?," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 10(1), pages 49-54, March.
    • Handle: RePEc:tei:journl:v:10:y:2017:i:1:p:49-54
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    More about this item

    Keywords

    Start-up companies; entrants; exits; economic growth; Bulgaria;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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