The Nature of Firm Growth
June 2018
Working Paper Number:
CES-18-30
Abstract
Only half of all startups survive past the age of five and surviving businesses grow at vastly different speeds. Using micro data on employment in the population of U.S. Businesses, we estimate that the lion's share of these differences is driven by ex-ante heterogeneity across firms, rather than by ex-post shocks. We embed such heterogeneity in a firm dynamics model and study how ex-ante differences shape the distribution of firm size, "up-or-out" dynamics, and the associated gains in aggregate output. "Gazelles" - a small subset of startups with particularly high growth potential - emerge as key drivers of these outcomes. Analyzing changes in the distribution of ex-ante firm heterogeneity over time reveals that the birth rate and growth potential of gazelles has declined, creating substantial aggregate losses.
Document Tags and Keywords
Keywords
Keywords are automatically generated using KeyBERT, a powerful and innovative
keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant
keywords.
By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the
text, highlighting the most significant topics and trends. This approach not only enhances searchability but
provides connections that go beyond potentially domain-specific author-defined keywords.
:
econometric,
macroeconomic,
estimating,
sale,
aggregate,
growth,
earnings,
startup,
endogenous,
recession,
autoregressive,
firm dynamics,
exogenous,
regress
Tags
Tags are automatically generated using a pretrained language model from spaCy, which excels at
several tasks, including entity tagging.
The model is able to label words and phrases by part-of-speech,
including "organizations." By filtering for frequent words and phrases labeled as "organizations", papers are
identified to contain references to specific institutions, datasets, and other organizations.
:
Total Factor Productivity,
Federal Reserve Bank,
Longitudinal Business Database,
State Energy Data System,
Duke University,
Business Dynamics Statistics
Similar Working Papers
Similarity between working papers are determined by an unsupervised neural
network model
know as Doc2Vec.
Doc2Vec is a model that represents entire documents as fixed-length vectors, allowing for the
capture of semantic meaning in a way that relates to the context of words within the document. The model learns to
associate a unique vector with each document while simultaneously learning word vectors, enabling tasks such as
document classification, clustering, and similarity detection by preserving the order and structure of words. The
document vectors are compared using cosine similarity/distance to determine the most similar working papers.
Papers identified with 🔥 are in the top 20% of similarity.
The 10 most similar working papers to the working paper 'The Nature of Firm Growth' are listed below in order of similarity.
-
Working PaperFirm Market Power and the Earnings Distribution🔥
December 2011
Working Paper Number:
CES-11-41
Using the Longitudinal Employer Household Dynamics (LEHD) data from the United States Census Bureau, I compute firm-level measures of labor market (monopsony) power. To generate these measures, I extend the dynamic model proposed by Manning (2003) and estimate the labor supply elasticity facing each...View Full Paper PDF
-
Working PaperDownsizing and Productivity Growth: Myth or Reality?🔥
April 1994
Working Paper Number:
CES-94-04
The conventional wisdom is that the rising productivity in the U.S. manufacturing sector in the 1980s has been driven by the apparently pervasive downsizing over this period. Aggregate evidence clearly shows falling employment accompanying the rise in productivity. In this paper, we examine the micr...View Full Paper PDF
-
Working PaperDoes Firms' Financial Status Affect Plant-Level Investment and Exit Decisions?🔥
January 1999
Working Paper Number:
CES-99-03
This paper investigates the influence of a firm's financial status on the within-firm allocation of funds, reflected in its plant-level investment and exit decisions. In the empirical analysis, financial status is measured by both standard measures and an indicator variable recently suggested by Kap...View Full Paper PDF
-
Working PaperThe Empirics of Firm Heterogeneity and International Trade🔥
September 2012
Working Paper Number:
CES-12-18
This paper reviews the empirical evidence on firm heterogeneity in international trade. A first wave of empirical findings from micro data on plants and firms proposed challenges for existing models of international trade and inspired the development of new theories emphasizing firm heterogeneity. S...View Full Paper PDF
-
Working PaperNew Perspectives on the Decline of U.S. Manufacturing Employment🔥
April 2018
Working Paper Number:
CES-18-17
We use relatively unexplored dimensions of US microdata to examine how US manufacturing employment has evolved across industries, rms, establishments, and regions. We show that these data provide support for both trade- and technology-based explanations of the overall decline of employment over this...View Full Paper PDF
-
Working PaperTesting for Factor Price Equality with Unobserved Differences in Factor Quality or Productivity🔥
September 2012
Working Paper Number:
CES-12-32
We develop a method for identifying departures from relative factor price equality that is robust to unobserved variation in factor productivity. We implement this method using data on the relative wage bills of non-production and production workers across 170 local labor markets comprising the cont...View Full Paper PDF
-
Working PaperThe Surprisingly Swift Decline of U.S. Manufacturing Employment
December 2013
Working Paper Number:
CES-13-59
This paper finds a link between the sharp drop in U.S. manufacturing employment beginning in 2001 and a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries where the threat of tariff hikes declines the most experience more severe employment losses al...View Full Paper PDF
-
Working PaperA Comparison of Training Modules for Administrative Records Use in Nonresponse Followup Operations: The 2010 Census and the American Community Survey
January 2017
Working Paper Number:
CES-17-47
While modeling work in preparation for the 2020 Census has shown that administrative records can be predictive of Nonresponse Followup (NRFU) enumeration outcomes, there is scope to examine the robustness of the models by using more recent training data. The models deployed for workload removal from...View Full Paper PDF
-
Working PaperGrown-Up Business Cycles
October 2015
Working Paper Number:
CES-15-33
We document two striking facts about U.S. firm dynamics and interpret their significance for employment dynamics. The first is the dramatic decline in firm entry and the second is the gradual shift of employment toward older firms since 1980. We show that despite these trends, the lifecycle dynamics...View Full Paper PDF
-
Working PaperThe Role of Start-Ups in StructuralTransformation
January 2016
Working Paper Number:
CES-16-38
The U.S. economy has been going through a striking structural transformation'the secular reallocation of employment across sectors'over the past several decades. We propose a decomposition framework to assess the contributions of various margins of firm dynamics to this shift. Using firm-level data,...View Full Paper PDF
