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Coping with high decline: firms’ resilience to adversity

Author

Listed:
  • Silviano Esteve-Pérez
  • Fabio Pieri
  • Diego Rodriguez

Abstract

This work investigates the factors that precipitate a firm’s sudden decline, which is defined as a short-term heavy contraction in firm size, and examines firms’ performance in the aftermath of a high-decline (HD) event. The empirical analysis reveals patterns of HD events over the business cycle and across markets, providing insights into the factors that enable firms’ resilience in terms of better growth performance after an HD event. Firms that upgrade their production processes and invest in human capital show better growth trajectories in the aftermath of an HD event.

Suggested Citation

  • Silviano Esteve-Pérez & Fabio Pieri & Diego Rodriguez, 2021. "Coping with high decline: firms’ resilience to adversity," DEM Working Papers 2021/08, Department of Economics and Management.
    • Handle: RePEc:trn:utwprg:2021/08
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    More about this item

    Keywords

    high-decline events; business cycle; resilience; growth trajectories;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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