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On the Persistence of Firm Expansion. The survival of new jobs in Austrian firms

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Author Info

  • Böheim, René

    (Department of Economics, University of Linz)

  • Stiglbauer, Alfred

    (Oesterreichische Nationalbank)

  • Winter-Ebmer, Rudolf

    (Department of Economics and Finance, Institute for Advanced Studies and University of Linz; IZA, Bonn; CEPR, London)

Abstract

While the volatility of job creations has been studied extensively, the survival chances of new jobs are less researched. The question when and how to expand a firm is of importance, both from the firm’s and from a macro perspective. Adjustment cost theories and arguments about option values of investment in firm expansion make predictions about the timing, sequencing and form of firm expansions. When we analyze 21 years of job creation in Austria, we find that the survival of new jobs (and of new firms) depends upon the state of the business cycle at the time of job creation, on the number of jobs created, and on firm age. Jobs in new firms last longer than new jobs in continuing firms.

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File URL: http://www.ihs.ac.at/publications/eco/es-173.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Institute for Advanced Studies in its series Economics Series with number 173.

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Length: 21 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:ihs:ihsesp:173

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Related research

Keywords: Job creation; Business cycle; Reallocation; Persistence;

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  1. Burgess, Simon & Lane, Julia & Stevens, David, 1995. "Job Flows, Worker Flows and Churning," CEPR Discussion Papers 1125, C.E.P.R. Discussion Papers.
  2. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
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  7. Boeri, Tito, 1996. "Is Job Turnover Countercyclical?," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 603-25, October.
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  11. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, 03.
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  13. Boeri, Tito & Bellmann, Lutz, 1995. "Post-entry behaviour and the cycle: Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 483-500, December.
  14. Andrew Figura, 2002. "Is reallocation related to the cycle? A look at permanent and temporary job flows," Finance and Economics Discussion Series 2002-16, Board of Governors of the Federal Reserve System (U.S.).
  15. Edlira Narazani, 2004. "Interrelationships Between Labor and Capital Adjustment Decisions," Labor and Demography 0412003, EconWPA.
  16. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, December.
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