A structural analysis of US entry and exit dynamics

• Miguel Casares ^[1] ; Hashmat Khan ^[2] ; Jean-Christophe Poutineau ^[3]
  1. [1] Universidad Pública de Navarra

     Universidad Pública de Navarra

     Pamplona, España

     
  2. [2] Carleton University

     Carleton University

     Canadá

     
  3. [3] Univer sité de Rennes I

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• Localización: Documentos de Trabajo ( Universidad Pública de Navarra. Departamento de Economía ), Nº. 1, 2018
• Idioma: inglés
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• Resumen

  • We report empirical evidence indicating that US business formation has recently turned more volatile, procyclical and persistent due to changes in exit dynamics. To study these stylized facts, we estimate a DSGE model with endogenous entry and exit. Business units feature heterogeneous productivity and they shut down if the present value of expected future dividends falls below the current liquidation value. The estimation results imply structural changes in US exit dynamics after 2007: the semi-elasticity of the exit rate to critical productivity has increased and the average plant-level productivity has decreased.