How Did Young Firms Fare During the Great Recession? Evidence from the Kauffman Firm Survey

Tiantian Yang and Rebecca Zarutskie

No 2015-85, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: We examine the evolution of several key firm economic and financial variables in the years surrounding and during the Great Recession using the Kauffman Firm Survey, a large panel of young firms founded in 2004 and surveyed for eight consecutive years. We find that these young firms experienced slower growth in revenues, employment, and assets and faced tighter financing conditions during the recessionary years. While we find some evidence that firm growth picked up following the recession, it is not clear that it returned to the levels it would have been absent the recessionary shock. We find little evidence that financing conditions for young firms loosened following the recession and show that financing constraints, in addition to diminished demand, may have contributed to these firms' slower growth. We discuss the strengths and the limitations of the Kauffman Firm Survey in measuring the impact of the Great Recession on young firms and their founders and consider features of future data collection and measurement efforts that would be useful in studying entrepreneurial activity over the business cycle.

Keywords: Entrepreneurship; Financing constraints; Firm performance; Great Recession; Young firms (search for similar items in EconPapers)
Pages: 42 pages
Date: 2015-09-23
New Economics Papers: this item is included in nep-bec, nep-cse and nep-ent
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Citations: View citations in EconPapers (7)

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http://www.federalreserve.gov/econresdata/feds/2015/files/2015085pap.pdf Full text (application/pdf)
http://dx.doi.org/10.17016/FEDS.2015.085 http://dx.doi.org/10.17016/FEDS.2015.085 (application/pdf)

Related works:
Chapter: How Did Young Firms Fare during the Great Recession? Evidence from the Kauffman Firm Survey (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2015-85

DOI: 10.17016/FEDS.2015.085

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