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Online Appendix to "Firm Entry and Exit during Recessions"

Author

Listed:
  • Joao Ayres

    (Inter-American Development Bank)

  • Gajendran Raveendranathan

    (McMaster University)

Abstract

We analyze aggregate shocks in a general equilibrium model of firm dynamics with entry and exit and financial frictions. Compared to the productivity shock, a shock to the collateral constraint (credit shock) generates a larger change in firm entry and exit. Calibrating the credit and productivity shocks to the Great Recession, we find that the credit shock accounts for lower entry, higher exit, and the concentration of exit among young firms during the Great Recession. The changes in entry and exit account for 19 and 24 percent of the fall in output and hours, respectively. Furthermore, we discuss how the modeling of potential entrants matters for the quantitative results, and perform a COVID-19 lockdown experiment. (Copyright: Elsevier)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Joao Ayres & Gajendran Raveendranathan, 2021. "Online Appendix to "Firm Entry and Exit during Recessions"," Online Appendices 20-136, Review of Economic Dynamics.
    • Handle: RePEc:red:append:20-136
    Note: The original article was published in the Review of Economic Dynamics
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    File URL: https://red-files-public.s3.amazonaws.com/appendix/20/20-136/AyresRaveendranathan2021_online_appendix.pdf
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    References listed on IDEAS

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    1. Otrachshenko, Vladimir & Popova, Olga & Nikolova, Milena & Tyurina, Elena, 2022. "COVID-19 and entrepreneurship entry and exit: Opportunity amidst adversity," Technology in Society, Elsevier, vol. 71(C).

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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