Age Effects, Leverage and Firm Growth

24 Pages Posted: 30 Jan 2006 Last revised: 18 Jul 2009

See all articles by Kim P. Huynh

Kim P. Huynh

Government of Canada - Bank of Canada; Indiana University Bloomington - Department of Economics

Robert J. Petrunia

Lakehead University - Department of Economics

Date Written: July 1, 2009

Abstract

Recent theories of firm dynamics emphasize the role of financial variables as determinants of firm growth. Empirically examining these relationships has been difficult, since there is a lack of financial data on the small, young, and private firms. Using a unique administrative data set, this paper considers the growth of new firms in Canadian manufacturing from a financial perspective. We find that financial factors, such as leverage and initial financial size, impact growth rates for new firms. Further, the inclusion of leverage has little impact on the economic significance of the conditional age and size relationships with firm growth.

Keywords: Firm Size Dynamics, Leverage, Age Effects, Dynamic Panel Data

JEL Classification: D21, G3, C23

Suggested Citation

Huynh, Kim P. and Petrunia, Robert J., Age Effects, Leverage and Firm Growth (July 1, 2009). Available at SSRN: https://ssrn.com/abstract=879284 or http://dx.doi.org/10.2139/ssrn.879284

Kim P. Huynh (Contact Author)

Government of Canada - Bank of Canada ( email )

234 Wellington Street
Ontario, Ottawa K1A 0G9
Canada

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

Robert J. Petrunia

Lakehead University - Department of Economics ( email )

Thunder Bay, P7B 5E1
Canada

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