Entrepreneurship Dynamics in Australia: Lessons from Micro-data

Sasan Bakhtiari

Research Paper 5/2017 |Word

Using a large firm-level dataset covering the years 2002 to 2015, I explore the dynamics of entrepreneurship in Australia and their evolution over time. The short answer is that the Australian entrepreneurial landscape has become less dynamic and more hazardous over the observed period. With time passing, relatively fewer entrepreneurs are entering the market, and those that enter are more likely to exit than their counterparts that entered in earlier years. In particular, there is a seemingly permanent increase in exit probability starting from the cohort of 2005 entries, followed by a temporary spike after the Global Financial Crisis (GFC). Despite fewer firms entering, the share of young firms from job creation has been steadily high. I finish by offering a few thoughts to help understand these changes.

JEL Codes: C55, L26, M13, Q33

Keywords: Entrepreneurship, Survival, Job Creation, Competition, Growth.

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