Growing firms are the drivers of economic dynamics. While the existing literature often focuses on the average effect of growth on firm survival, we investigate how survival rates vary across the growth distribution using Dutch longitudinal firm-level data (1999-2012). We theorize and find a U-shaped relationship between organic employment growth and subsequent exit due to firm death in various model specifications. Low positive growth increases survival, too much growth could be harmful for some subgroups of firms, and the steepness of the U-shape depends on firm age, size, and industry.
ASJC Scopus subject areas
- Economics and Econometrics