Declining business dynamism in Belgium

Gert Bijnens and Jozef Konings

Small Business Economics, 2020, vol. 54, issue 4, No 15, 1239 pages

Abstract: Abstract Using 30 years of data from all for-profit firms incorporated in Belgium, we show that business dynamism and entrepreneurship have been declining over recent decades. This decline set in around the year 2000 following a decade of declining start-up rates. We also observe a decreasing share of young firms that become high-growth firms and more importantly a declining propensity for small (not necessarily young) firms to experience fast growth. Interestingly, a similar decline in business dynamism occurred in the USA, where firms face a far less rigid institutional environment than in Belgium. These remarkable similarities suggest that global trends rather than country-specific changes are at the basis of this evolution. We show evidence that points to the role of ICT intensity in explaining the secular decline in business dynamism.

Keywords: Business dynamism; Firm dynamics; Firm growth; Entry; Reallocation; High-growth firms; High-impact firms (search for similar items in EconPapers)
JEL-codes: D21 E24 J6 L25 L26 M13 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (17)

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Working Paper: Declining Business Dynamism in Belgium (2018)
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DOI: 10.1007/s11187-018-0123-4

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