Survival of Firms during Economic Crisis
This paper estimates the survival time of nearly 7,000 firms in a dozen high-income and middle-income countries in a scenario of extreme economic distress, using the World Bank's Enterprises Surveys. Under the assumption that firms have no inc...
| Main Authors: | , , , |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/140091589221773664/Survival-of-Firms-during-Economic-Crisis http://hdl.handle.net/10986/33751 |
| Summary: | This paper estimates the survival time
of nearly 7,000 firms in a dozen high-income and
middle-income countries in a scenario of extreme economic
distress, using the World Bank's Enterprises Surveys.
Under the assumption that firms have no incoming revenues
and cover only fixed costs, the median survival time across
industries ranges within 8 to 19 weeks, while on average
firms have liquidity to survive between 12 and 38 weeks.
Schumpeter's theory of creative destruction is not
corroborated in the data, as potential exit is not
predicated on the size of firms, their age, or their productivity. |
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