IDEAS home Printed from https://ideas.repec.org/a/iza/izawol/journl2017n371.html
   My bibliography  Save this article

Firm size and business cycles

Author

Listed:
  • Tulio A. Cravo

    (Inter-American Development Bank, USA)

Abstract

The discussion on how economic activity affects employment in large and small businesses is critical for the formulation of labor policies, especially during recessions. Knowing how firm size is related to job creation and job destruction is important to design effective policies aimed at dampening employment fluctuations. Recent evidence for developed countries indicates that large firms are proportionately more sensitive to cycles than small firms; however, this pattern is not confirmed for periods of credit constraint or in a developing country context, where small businesses might be more sensitive due to more extreme credit constraints.

Suggested Citation

  • Tulio A. Cravo, 2017. "Firm size and business cycles," IZA World of Labor, Institute of Labor Economics (IZA), pages 371-371, June.
    • Handle: RePEc:iza:izawol:journl:2017:n:371
    as

    Download full text from publisher

    File URL: https://wol.iza.org/uploads/articles/371/pdfs/firm-size-and-business-cycles.pdf
    Download Restriction: no
    File URL: https://wol.iza.org/articles/firm-size-and-business-cycles
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mark Gertler & Simon Gilchrist, 1994. "Monetary Policy, Business Cycles, and the Behavior of Small Manufacturing Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 309-340.
    2. Giuseppe Moscarini & Fabien Postel-Vinay, 2009. "Large Employers Are More Cyclically Sensitive," NBER Working Papers 14740, National Bureau of Economic Research, Inc.
    3. Melvyn G. Coles & Dale T. Mortensen, 2016. "Equilibrium Labor Turnover, Firm Growth, and Unemployment," Econometrica, Econometric Society, vol. 84, pages 347-363, January.
    4. John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2015. "Cyclical Reallocation of Workers Across Employers by Firm Size and Firm Wage," NBER Working Papers 21235, National Bureau of Economic Research, Inc.
    5. Giuseppe Moscarini & Fabien Postel-Vinay, 2016. "Did the Job Ladder Fail after the Great Recession?," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 55-93.
    6. Lisa B. Kahn & Erika McEntarfer, 2014. "Employment Cyclicality and Firm Quality," NBER Working Papers 20698, National Bureau of Economic Research, Inc.
    7. Teresa C Fort & John Haltiwanger & Ron S Jarmin & Javier Miranda, 2013. "How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 520-559, August.
    8. Cravo, Túlio A., 2011. "Are small employers more cyclically sensitive? Evidence from Brazil," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 754-769.
    9. repec:hal:spmain:info:hdl:2441/59cr4u3mmr9pobrceptvua5g8c is not listed on IDEAS
    10. Giuseppe Moscarini & Fabien Postel-Vinay, 2009. "The Timing of Labor Market Expansions: New Facts and a New Hypothesis," NBER Chapters, in: NBER Macroeconomics Annual 2008, Volume 23, pages 1-51, National Bureau of Economic Research, Inc.
    11. Giuseppe Moscarini & Fabien Postel-Vinay, 2012. "The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment," American Economic Review, American Economic Association, vol. 102(6), pages 2509-2539, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amparo Nagore García & Arthur van Soest, 2017. "New job matches and their stability before and during the crisis," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(7), pages 975-995, October.
    2. Oznur Ozdamar & Eleftherios Giovanis & Sahizer Samuk, 2020. "State business relations and the dynamics of job flows in Egypt and Turkey," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(4), pages 519-558, December.
    3. John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2015. "Cyclical Reallocation of Workers Across Employers by Firm Size and Firm Wage," NBER Working Papers 21235, National Bureau of Economic Research, Inc.
    4. Giuseppe Moscarini & Fabien Postel-Vinay, 2016. "Wage Posting and Business Cycles: a Quantitative Exploration," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 19, pages 135-160, January.
    5. Giuseppe Moscarini & Fabien Postel-Vinay, 2016. "Did the Job Ladder Fail after the Great Recession?," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 55-93.
    6. John C. Haltiwanger & Henry R. Hyatt & Lisa B. Kahn & Erika McEntarfer, 2018. "Cyclical Job Ladders by Firm Size and Firm Wage," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 52-85, April.
    7. Henry Hyatt & Erika McEntarfer & John Haltiwanger, 2014. "Cyclical Reallocation of Workers Across Large and Small Employers," 2014 Meeting Papers 735, Society for Economic Dynamics.
    8. Lisa B. Kahn & Erika McEntarfer, 2014. "Employment Cyclicality and Firm Quality," NBER Working Papers 20698, National Bureau of Economic Research, Inc.
    9. repec:hal:spmain:info:hdl:2441/6smk3sindo94e9l730pea1ea5e is not listed on IDEAS
    10. repec:hal:spmain:info:hdl:2441/5taek6gt3k8m0r69e1j1ombcc5 is not listed on IDEAS
    11. Sung-Eun Yu, 2017. "The Behavior of Small and Large Firms during Business Cycle Episodes and during Monetary Policy Episodes: A Comparison of Earlier and Recent Periods," Working Paper Series, Department of Economics, University of Utah 2017_05, University of Utah, Department of Economics.
    12. Camilo Morales-Jimenez, 2017. "The Cyclical Behavior of Unemployment and Wages under Information Frictions," Finance and Economics Discussion Series 2017-047, Board of Governors of the Federal Reserve System (U.S.).
    13. Clémence Berson & Marta De Philippis & Eliana Viviano, 2020. "Job-to-job flows and wage dynamics in France and Italy," Questioni di Economia e Finanza (Occasional Papers) 563, Bank of Italy, Economic Research and International Relations Area.
    14. Alviarez, Vanessa & Cravino, Javier & Levchenko, Andrei A., 2017. "The growth of multinational firms in the Great Recession," Journal of Monetary Economics, Elsevier, vol. 85(C), pages 50-64.
    15. Francesco Manaresi, 2015. "Net employment growth by firm size and age in Italy," Questioni di Economia e Finanza (Occasional Papers) 298, Bank of Italy, Economic Research and International Relations Area.
    16. Giuseppe Moscarini & Fabien Postel-Vinay, 2013. "Stochastic Search Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1545-1581.
    17. Kudlyak, Marianna & Sánchez, Juan M., 2017. "Revisiting the behavior of small and large firms during the 2008 financial crisis," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 48-69.
    18. Huber, Peter & Oberhofer, Harald & Pfaffermayr, Michael, 2017. "Who creates jobs? Econometric modeling and evidence for Austrian firm level data," European Economic Review, Elsevier, vol. 91(C), pages 57-71.
    19. John Haltiwanger & Henry Hyatt & Erika McEntarfer, 2018. "Who Moves Up the Job Ladder?," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 301-336.
    20. Neil Mehrotra, 2018. "Debt Sustainability in a Low Interest Rate World," 2018 Meeting Papers 285, Society for Economic Dynamics.
    21. Ueno, Yuko, 2014. "Size-specific Effects in Job Reallocation and Worker Mobility: Japan’s Experience from the 1990s," CIS Discussion paper series 624, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    22. Manuel Adelino & Song Ma & David Robinson, 2017. "Firm Age, Investment Opportunities, and Job Creation," Journal of Finance, American Finance Association, vol. 72(3), pages 999-1038, June.

    More about this item

    Keywords

    job flows; firm size; business cycles;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    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:iza:izawol:journl:2017:n:371. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Institute of Labor Economics (IZA) (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    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.