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How Are Firms Affected by the Crisis and How Do They React?


  • Westergård-Nielsen, Niels C.

    () (Copenhagen Business School)

  • Neamtu, Ioana

    () (Aarhus University)


The recession started in 2008 constituted a massive shock to consumers and most firms all over the Western World. Firms were hit on their sales and finances. However, little is known on how badly they were hit and how they coped with the difficulties. This paper gives a rare and fairly early glimpse on how private Danish firms were hit and how they adjusted in order to survive the crisis. The first phase of the recession led to the largest loss of jobs since the oil crisis in Denmark. Four years into the recession we see that larger firms are gradually creating jobs again, although the overall job growth is still negative (Statistics Denmark, 2012). Consequently we present an assessment of factors that have been important in explaining why some firms have been able to recreate jobs and others have not. Especially, we point at the critical role of access to credit in creating and destroying jobs. The paper is based on a survey run on all Danish firms with more than 20 employees in November and December 2011.

Suggested Citation

  • Westergård-Nielsen, Niels C. & Neamtu, Ioana, 2012. "How Are Firms Affected by the Crisis and How Do They React?," IZA Discussion Papers 6671, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6671

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    Cited by:

    1. Kümmerling, Angelika. & Lehndorff, Steffen., 2013. "The use of working time-related crisis response measures during the Great Recession," ILO Working Papers 994841273402676, International Labour Organization.

    More about this item


    crisis; impact on firms; credit constraints; job growth and destruction; survey;

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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