Working Paper: CEPR ID: DP4614
Authors: John McMillan
Abstract: This Paper (a) provides a framework for quantifying any economy?s flexibility, and (b) reviews the evidence on New Zealand firms? birth, growth and death. The data indicate that, by and large, the labour market and the financial market are doing their job.
Keywords: flexibility; turnover
JEL Codes: D23; L11; O56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| New Zealand's economic flexibility (O56) | entrepreneurship (M13) |
| New Zealand's economic flexibility (O56) | productivity (O49) |
| regulatory environment (G38) | entrepreneurship (M13) |
| low regulatory costs (G18) | firm formation (L26) |
| firm turnover (L14) | productivity growth (O49) |
| movement of resources from less productive to more productive firms (F20) | economic dynamism (O49) |
| firm turnover (L14) | adjustment costs on workers (J32) |