Firm resilience and growth during the economics crisis: lessons from the Greek depression

Christos, Genakos, Kaplanis, Ioannis, Tagaraki, Maria Theano and Tsakanikas, Aggelos (2023) Firm resilience and growth during the economics crisis: lessons from the Greek depression. GreeSE Papers: Hellenic Observatory Discussion Papers on Greece and Southeast Europe (186). Hellenic Observatory, London School of Economics and Political Science, London, UK.

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Abstract

The global financial crisis that burst in 2008 adversely affected business performance in many countries, especially in Europe. However, the impact of the crisis on entrepreneurship and business dynamics differed amongst countries, depending on their businesses resilience, the policies implemented, but also their predominant productive structure. The magnitude and length of the Greek depression have no precedent among modern middle and high-income economies. Still, to date, there is no systematic analysis of the impact of the crisis on entrepreneurship and business dynamism. This study attempts to fill this gap by examining individual firm, sectoral and regional level characteristics that might affect existing firm resilience and new firm survival rate. We use two sources of data with the most extensive coverage of small (sole proprietorship) and large (other legal status firms) firms containing information on entry and exit in Greece. Matching data from patents and trademarks allow us to examine the interplay between entrepreneurship and innovation. Our analysis focuses on the factors that help or hinder firm survival and growth. We find that the crisis increased the exit likelihood for a firm by 5% to 16%. Larger firms, with significant fixed assets, lower financial leverage, operating in concentrated industries, but also those that are innovation and export oriented tend to have better chances of survival compared to their counterparts. These results are important for designing business policies not only in Greece but also other countries facing similar crises.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.lse.ac.uk/hellenic-observatory/publica...
Additional Information:	© 2023 The Authors
Divisions:	Hellenic Observatory
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HF Commerce J Political Science > JN Political institutions (Europe)
JEL classification:	D - Microeconomics > D2 - Production and Organizations > D20 - General L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O30 - General R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
Date Deposited:	11 Jul 2023 13:45
Last Modified:	16 Sep 2023 00:03
URI:	http://eprints.lse.ac.uk/id/eprint/119705

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