Firm size and business cycles

Labor Productivity Dynamics in Spain: A Firm-Level Perspective

“…Large firms tend to disproportionally lower investment when the real interest rate increases, total deposit growth declines, and economic policy uncertainty rises. This result is consistent with recent findings in the literature that large companies are more sensitive to economic cycles in advanced economies (Cravo, 2017) and contributing the most to economic fluctuations (Crouzet and Mehrotra, 2020). It suggests that supporting systemic firms during economic downturns could help better sustain the investment potential of the business sector.…”

Labor Productivity Dynamics in Spain: A Firm-Level Perspective

“…Large firms tend to disproportionally lower investment when the real interest rate increases, total deposit growth declines, and economic policy uncertainty rises. This result is consistent with recent findings in the literature that large companies are more sensitive to economic cycles in advanced economies (Cravo, 2017) and contributing the most to economic fluctuations (Crouzet and Mehrotra, 2020). It suggests that supporting systemic firms during economic downturns could help better sustain the investment potential of the business sector.…”

Employment Cyclicality by Firm Size, Wage, Productivity and Age in Brazil

“…Nevertheless, the results shown in Figure 2 provide a clear warning that firm ranking cannot assume that the correlations among employment size, wages, and productivity are positive, as suggested in Moscarini and Postel-Vinay (2012). 18 The stylized facts about employment cyclicality are complex, and, as Cravo (2017) notes, recent studies are improving our understanding of employment cyclicality by indicating that other aspects such as the age of firms, credit constraints, and the use of direct productivity proxies are important. 18 Table 2 shows that the correlations between TFP and employment, wages, and labor productivity are weak.…”

“…The result is a dataset that is a balanced longitudinal employment series with continuing firms that 11 Annual longitudinal linked employer-employee series were constructed before; however, this paper overcomes the computational difficulties and constructs, for the first-time, monthly job flow longitudinal data to study employment dynamics. A simple exercise using part of this data can be seen in Cravo (2017). appear both in RAIS and PIA in January 2000 and encompasses 4,988,557 workers as of December 2014.…”

“…In developing countries such as Brazil, the labor market is characterized by complex and rigid labor laws that increase hiring costs in the formal sector and affect firm behavior. 3 The scant evidence available (e.g., Cravo 2011Cravo , 2017 indicates that small firms behave differently in Brazil in a developing country context when compared to more developed economies, but detailed evidence is needed to guide policies aimed at reducing employment fluctuations in recessions. As such, academics and policy-makers can benefit greatly from deeper knowledge about the factors influencing employment dynamics in different groups of firms during business cycles in developing countries.…”