Recession and Recovery: The Distribution of EU Firm Growth 2005-2014
This report investigates firm growth before, during and after the Great Recession 2007-2009.
We use a representative sample of firms from the business economy in 16 Member States of the
European Union (EU) between 2005 and 2014. Empirical analysis of firm distributions across time
reveal the following facts. (i) The Great Recession of 2007-2009 reduced growth across the board.
(ii) The recovery process though was disproportionately driven by a few large firms. (iii) During the
first phase of the recovery, the firm growth distribution shifted upwards as a whole. (iv) During the
second phase, only the left tail of negative growth got shorter. (iii) The recession reduced the share
of HGEs in all size classes, but especially among large firms. (iv) Yet, even during the Great Recession
HGEs played an important role for aggregate sales growth. (v) Although HGEs tend to be smaller
than the average firm, their outstanding contribution to aggregate sales growth is predominantly
driven by large HGEs. This holds true throughout the recession. We conclude with insights from
the recovery of the Great Recession that might be relevant also in the current COVID-19 context.
FLACHENECKER Florian;
KORNEJEW Martin;
JANIRI Mario;
2021-02-22
Publications Office of the European Union
JRC123700
978-92-76-30425-8 (online),
1831-9424 (online),
EUR 30600 EN,
OP KJ-NA-30600-EN-N (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC123700,
10.2760/812229 (online),
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