Firms' Relative Sensitivity to Aggregate Shocks and the Dynamics of Gross Job Flows

Pinto, Eugenio (2009) Firms' Relative Sensitivity to Aggregate Shocks and the Dynamics of Gross Job Flows. [Discussion Paper]. p. 16. Finance and Economics Discussion Series. Working Paper (No. 2009-02).

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We propose a measure for the importance of aggregate shocks for fluctuations in job flows at the firm level. Using data for the Portuguese economy, we find that large and old firms exhibit higher relative sensitivity to aggregate shocks and have a disproportional influence over the dynamics of aggregate job reallocation. In the overall economy, since large and old firms reallocate jobs less procyclically than small and young firms, job reallocation is less procyclical than if firm size and age classes were equally sensitive to aggregate shocks. A similar result applies in the manufacturing and the transportation and public utilities sectors. However, in the services and retail trade sectors the reallocation patterns are more similar across firm size and age, likely reflecting the expansion of existing and the creation of new industries. We conclude that large and old firms seem relatively more important to assess the state of the business cycle.

Item Type:Report / Paper (Discussion Paper)
Research documents and activity classification:Working Papers > Refereed Working Papers / of international relevance
Divisions:Department of Business and Management
Additional Information:The definitive version of the paper has been accepted by "Labour Economics". Available online: 20th July, 2010.
Uncontrolled Keywords:Aggregate shocks, gross job flows, firm heterogeneity.
MIUR Scientific Area:Area 13 - Economics and Statistics > SECS-P/07 Business Administration
Deposited By:Maria Teresa Nistico
Deposited On:13 Dec 2010 14:49
Last Modified:13 Dec 2010 14:49

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