Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship

• 成果类型: Article
• 署名作者: Babina, Tania
• 署名单位: Columbia University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz110
• 发表日期: 2020
• 页码: 4061
• 关键词: firm; constraints; debt; PRODUCTIVITY; BOUNDARIES; OWNERSHIP; returns; GROWTH; COSTS; RISK

摘要

Using U.S. Census firm-worker data, I document that firms' financial distress has an economically important effect on employee departures to entrepreneurship. The impact is amplified in the high-tech and service sectors, where employees are key assets. In states with enforceable noncompete contracts, the effect is mitigated. Compared to typical entrepreneurs, distress-driven entrepreneurs are high-wage workers who found better firms, as measured by jobs, pay, and survival. Startup jobs compensate for 33% of job losses at the constrained incumbents. Overall, the financial inability of incumbent firms to pursue productive opportunities increases the reallocation of economic activity into new firms.