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Entrepreneurship and the Business Cycle: Do New Technology-Based Firms Differ?

Author

Listed:
  • Ejermo, Olof

    (CIRCLE, Lund University)

  • Xiao, Jing

    (CIRCLE, Lund University and Department of Economic History, Lund University, Sweden)

Abstract

We investigate the relationship between the survival performance of new technologybased firms (NTBFs) over the business cycle and compare them against other entrepreneurial firms. Our data comprise the entire population of entrepreneurial firms entering the Swedish economy from 1991 to 2002, which we follow until 2007. Discrete-time duration models are employed to investigate whether the business cycle impacts differently on the survival likelihood of NTBFs vs. other entrepreneurial firms. Our main findings are three. First, NTBFs generally experience a lower hazard rate compared to other entrepreneurial firms. Second, all entrepreneurial firms are sensitive to, and follow a pro-cyclical pattern of survival likelihood over the business cycle. Three, when comparing NTBFs with firms without self-employees we find that NTBFs are more sensitive to business cycle fluctuations

Suggested Citation

  • Ejermo, Olof & Xiao, Jing, 2013. "Entrepreneurship and the Business Cycle: Do New Technology-Based Firms Differ?," Papers in Innovation Studies 2013/19, Lund University, CIRCLE - Centre for Innovation Research.
    • Handle: RePEc:hhs:lucirc:2013_019
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    More about this item

    Keywords

    new technology-based firms; exit; survival probability; the business cycle; discrete-time duration models; Sweden;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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