Young Firms, Old Capital / Song Ma, Justin Murfin, Ryan D. Pratt.

Format:

Book

Author/Creator:

Ma, Song.

Contributor:

National Bureau of Economic Research.

Murfin, Justin.

Pratt, Ryan D.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29189.

NBER working paper series no. w29189

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

Across a broad range of equipment types and industries, we document a pattern of local capital reallocation from older firms to younger firms. Start-ups purchase a disproportionate share of old physical capital previously owned by more mature firms. The evidence is consistent with financial constraints driving differential demand for vintage capital. The local supply of used capital influences start-up entry, job creation, investment choices, and growth, particularly when capital is immobile. Conversely, incumbents accelerate capital replacement in the presence of more young firms. The evidence suggests previously undocumented benefits to co-location between old and young firms.

Notes:

Print version record

August 2021.