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Business creation during COVID-19

Bahaj, Saleem, Piton, Sophie, Savagar, Anthony (2024) Business creation during COVID-19. Economic Policy, 39 (119). pp. 611-648. ISSN 0266-4658. E-ISSN 1468-0327. (doi:10.1093/epolic%2Feiae008) (KAR id:105904)

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.

Item Type: Article
DOI/Identification number: 10.1093/epolic%2Feiae008
Uncontrolled keywords: coronavirus; commerce
Subjects: H Social Sciences > HB Economic Theory
Divisions: Divisions > Division of Human and Social Sciences > School of Economics
Depositing User: Suzanne Duffy
Date Deposited: 09 May 2024 11:44 UTC
Last Modified: 05 Nov 2024 13:11 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/105904 (The current URI for this page, for reference purposes)

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