Young firm growth dynamics– a longitudinal analysis with German sales tax data

We study the growth patterns of newly founded firms in their first seven years based on the German Turnover Tax Statistics Panel 2001-2010. We can show that these firms frequently grow in the early years. About one of three new ventures grows steadily in the considered period - sometimes interrupted by temporary setbacks. In less capital-intensive sectors many firms seem to deliberately strive for less growth. These are often solo self-employed individuals. Each sixth firm experiences losses in sales in all considered periods, but remain on the market. These firms must not be doomed to fail. Instead, they seem to require more time of progress and development in order to grow in the future.

Wolter, H.-J.; Werner, A.; Schneck, S. (2015): Zur Entwicklungsdynamik neugegründeter Unternehmen - Eine Längsschnittanalyse auf Basis des Umsatzsteuerpanels, IfM Bonn: IfM-Materialien Nr. 238, Bonn.

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