IDEAS home Printed from https://ideas.repec.org/a/eee/jmacro/v87y2026ics0164070426000029.html

The impact of financial uncertainty shocks on firm creation across US states

Author

Listed:
  • Cheng, Chak Hung Jack
  • Hankins, William B.
  • Stone, Anna-Leigh

Abstract

This paper provides novel empirical evidence on the effects of a financial uncertainty shock on firm creation across the US states. Using state-level firm data between 1979 and 2019, we find that on average a one standard deviation financial uncertainty shock is associated with a 0.12 percentage point decline in the firm entry rate. Cross sectional regressions reveal that heterogeneity in industry composition and the existence and duration of right-to-work laws are an important source of transmission of a financial uncertainty shock to the states. In particular, a financial uncertainty shock is associated with larger declines in the firm entry rate in states with larger manufacturing and mining sectors and in states with a right-to-work law.

Suggested Citation

  • Cheng, Chak Hung Jack & Hankins, William B. & Stone, Anna-Leigh, 2026. "The impact of financial uncertainty shocks on firm creation across US states," Journal of Macroeconomics, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:jmacro:v:87:y:2026:i:c:s0164070426000029
    DOI: 10.1016/j.jmacro.2026.103739
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0164070426000029
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jmacro.2026.103739?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jmacro:v:87:y:2026:i:c:s0164070426000029. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622617 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.