Student Faculty Macro Lunch: "Customer Acquisition, Business Dynamism and Aggregate Growth∗"

Event ID
146514
Event Date
-
Status
Happening As Scheduled
Calendar URL
http://events.berkeley.edu/index.php/calendar/sn/econ.html?event_ID=146514
Location
597 Evans Hall
Performers
Petr Sedlacek, UNSW Business School (Speaker - Featured)
Primary Event Type
Seminar
Secondary Event Type
Student Faculty Macro

Seminar: Student Faculty Macro | November 29 | 12-1 p.m. | 597 Evans Hall

 Petr Sedlacek, Professor, UNSW Business School

 Clausen Center

Abstract: The process of firm entry, growth and exit – “business dynamism” – lies at the heart of modern growth models. Recent evidence suggests that business dynamism is largely driven by customer acquisition. Therefore, we develop an endogenous growth model in which firms not only innovate, but also accumulate customers in order to sell their products. In our framework, customer acquisition boosts firms’ innovation incentives and shifts market shares towards high-growth firms (“gazelles”). Combined, these effects explain over 1/3 of aggregate growth and substantially change predictions about the efficacy of growth policies. Finally, we document support for key model predictions using firm-level micro-data.

 Judy Ikeda, chan@econ.berkeley.edu, 510-642-0822

 Jane Youn,  jyoun@berkeley.edu,  510-643-0717

 Paper Here