Bahaj, Saleem;
Piton, Sophie;
Savagar, Anthony;
(2024)
Business creation during COVID-19.
Economic Policy
, 39
(119)
pp. 611-648.
10.1093/epolic/eiae008.
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Abstract
Using UK data, we present greater empirical detail on the puzzling firm dynamics that emerged during coronavirus disease 2019 (COVID-19). We show that firm entry increased during the pandemic across several countries, and this contrasts with typical recessions where firm entry declines. Additionally, the rise in firm entry is driven by individual entrepreneurs creating companies for the first time, particularly in online retail. We find evidence that firm creation responded significantly to declines in retail footfall and that firms created during the pandemic are more likely to exit and less likely to post jobs. Overall, this implies that despite surging firm creation during the pandemic, the overall employment effect is limited. Finally, we find that the primary contributor to limited employment creation is the shift in ownership composition of new entrants during COVID.
| Type: | Article |
|---|---|
| Title: | Business creation during COVID-19 |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1093/epolic/eiae008 |
| Publisher version: | http://dx.doi.org/10.1093/epolic/eiae008 |
| Language: | English |
| Additional information: | © CEPR, CESifo, Sciences Po, 2024. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/). |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management |
| URI: | https://discovery-pp.ucl.ac.uk/id/eprint/10195485 |
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