Template-Type: ReDIF-Article 1.0

Author-Name: Péter Bauer
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: bauerp@mnb.hu
Author-Person: pba1589

Author-Name: Marianna Endrész
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: valentinyinem@mnb.hu
Author-Person: pva332

Title: Firm Dynamics and Aggregate Growth: The Case of Hungary

Abstract: This paper reports some stylised facts on firm dynamics in Hungary for the period
2001–2015. We find that young firms tend to be small. They grow fast, but at the
same time they are risky, have a high exit rate and their productivity is lower than
that of older firms. Despite their small share in aggregate output, their contribution
to aggregate growth is significant. Their dynamism comes from their young age
rather than from their small size. Export performance is somewhat different, as
older firms remain more active and make a significant contribution to aggregate
growth. During the crisis, young firms still made a positive contribution to growth,
but the deteriorating performance of older firms dominated the aggregate picture,
because of their large share in production. The behaviour of firm groups by size and
age varied during the crisis and the recovery. Interestingly, the recovery seems to
be dominated by the lower-end of the distribution of firm population; destruction
eased and fewer firms exited, but there was no recovery in gross creation. Firm
entry kept falling even during the recovery period, which must have contributed to
the sluggish, weak recovery.

Classification-JEL: D22, L25
Keywords: firm dynamics, firm life-cycle, crisis, economic growth, empirical analysis
Pages: 68-98
Volume: 17
Issue: 2
Year: 2018
File-URL: http://english.hitelintezetiszemle.hu/letoltes/fer-17-2-st3-bauer-endresz.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:17:y:2018:i:2:p:68-98