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Volatility and firm growth

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Abstract

A growing body of macroeconomic evidence suggests that volatility is detrimental for economic growth. The channel through which this materializes, however, is less clear. Moreover, substantive evidence based on disaggregate data is scarce. In this paper, we provide empirical support for this relationship using a detailed cross-country firm-level dataset. We also provide additional evidence that institutional obstacles magnify the adverse effect of perceived volatility on firm growth.

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Authors and Affiliations

  1. Inter-American Development Bank, Washington, DC, USA

    Alberto Chong

  2. Ben Gurion University, Beer-sheba, Israel

    Mark Gradstein

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  1. Alberto Chong
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  2. Mark Gradstein
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Correspondence to Alberto Chong.

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Chong, A., Gradstein, M. Volatility and firm growth. J Econ Growth 14, 1–25 (2009). https://doi.org/10.1007/s10887-009-9037-y

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  • DOI: https://doi.org/10.1007/s10887-009-9037-y

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