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Professor Javier Miranda, PhD

Professor Javier Miranda, PhD
Current Position

since 1/25

Head of the Centre for Business and Productivity Dynamics (IWH-CBPD)

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 1/23

Head of the Research Group Entrepreneurship, Innovation, and Productivity Growth

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 4/21

Professor

Friedrich Schiller University Jena

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Research Interests
  • innovation
  • entrepreneurship
  • empirical productivity research

Javier Miranda joined the institute in March 2021. He is a Professor at Friedrich Schiller University Jena and head of the Centre for Business and Productivity Dynamics (IWH-CBPD) as well as the IWH-CompNet-team. His research focuses on business dynamics, job creation and growth, entrepreneurship, high growth firms, innovation, business finance, and synthetic data.

Javier Miranda received his bachelor's degree from Universidad Autonoma Madrid, his master's degree and his PhD from American University in Washington, D.C. Prior to joining IWH, he was Principal Economist at the U.S. Census Bureau.

Your contact

Professor Javier Miranda, PhD
Professor Javier Miranda, PhD
- Department Centre for Business and Productivity Dynamics
Send Message +49 345 7753-750

Publications

Citations
12869

Refereed Publications

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The (Heterogeneous) Economic Effects of Private Equity Buyouts

Steven J. Davis John Haltiwanger Kyle Handley Ben Lipsius Josh Lerner Javier Miranda

in: Management Science, forthcoming

Abstract

<p>The effects of private equity buyouts on employment, productivity, and job reallocation vary tremendously with macroeconomic and credit conditions, across private equity groups, and by type of buyout. We reach this conclusion by examining the most extensive database of U.S. buyouts ever compiled, encompassing thousands of buyout targets from 1980 to 2013 and millions of control firms. Employment shrinks 12% over two years after buyouts of publicly listed firms—on average, and relative to control firms—but expands 15% after buyouts of privately held firms. Postbuyout productivity gains at target firms are large on average and much larger yet for deals executed amid tight credit conditions. A postbuyout tightening of credit conditions or slowing of gross domestic product growth curtails employment growth and intrafirm job reallocation at target firms. We also show that buyout effects differ across the private equity groups that sponsor buyouts, and these differences persist over time at the group level. Rapid upscaling in deal flow at the group level brings lower employment growth at target firms. We relate these findings to theories of private equity that highlight agency problems at portfolio firms and within the private equity industry itself.</p>

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Robot Hubs and the Use of Robotics in US Manufacturing Establishments

Erik Brynjolfsson Catherine Buffington Nathan Goldschlag J. Frank Li Javier Miranda Robert Seamans

in: American Economic Association Papers and Proceedings, May 2025

Abstract

<p>We use data from the Annual Survey of Manufactures to study the characteristics and geographic distribution of investments in robots across US manufacturing establishments. Robotics adoption and robot intensity (the number of robots per employee) cluster in "robot hubs." Establishments that report having robotics are larger and have a larger production worker share, lower pay per worker, lower labor share, and higher capital expenditures, including higher IT capital expenditures. Notably, establishments are more likely to have robots if other establishments in the same core-based statistical area and industry also report having robotics, suggestive of agglomeration and peer effects.</p>

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Robot Hubs: The Skewed Distribution of Robots in US Manufacturing

Erik Brynjolfsson Catherine Buffington Nathan Goldschlag J. Frank Li Javier Miranda Robert Seamans

in: American Economic Association Papers and Proceedings, May 2023

Abstract

<p>We use establishment-level data from the US Census Bureau's Annual Survey of Manufactures to study the characteristics and geographic locations of investments in robots. We find that the distribution of robots is highly skewed across locations. Some locations, which we call Robot Hubs, have far more robots than one would expect even after accounting for industry and manufacturing employment. We characterize these Robot Hubs along several industry, demographic, and institutional dimensions. The presences of robot integrators, which specialize in helping manufacturers install robots, and of higher levels of union membership are positively correlated with being a Robot Hub.</p>

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Immigration and Entrepreneurship in the United States

Pierre Azoulay Benjamin Jones J. Daniel Kim Javier Miranda

in: American Economic Review: Insights, No. 1, 2022

Abstract

Immigration can expand labor supply and create greater competition for native-born workers. But immigrants may also start new firms, expanding labor demand. This paper uses U.S. administrative data and other data resources to study the role of immigrants in entrepreneurship. We ask how often immigrants start companies, how many jobs these firms create, and how these firms compare with those founded by U.S.-born individuals. A simple model provides a measurement framework for addressing the dual roles of immigrants as founders and workers. The findings suggest that immigrants act more as &quot;job creators&quot; than &quot;job takers&quot; and that non-U.S. born founders play outsized roles in U.S. high-growth entrepreneurship

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Changing Business Dynamism and Productivity: Shocks versus Responsiveness

Ryan A. Decker John Haltiwanger Ron S. Jarmin Javier Miranda

in: American Economic Review, No. 12, 2020

Abstract

The pace of job reallocation has declined in the United States in recent decades. We draw insight from canonical models of business dynamics in which reallocation can decline due to (i) lower dispersion of idiosyncratic shocks faced by businesses, or (ii) weaker marginal responsiveness of businesses to shocks. We show that shock dispersion has actually risen, while the responsiveness of business-level employment to productivity has weakened. Moreover, declining responsiveness can account for a significant fraction of the decline in the pace of job reallocation, and we find suggestive evidence this has been a drag on aggregate productivity.

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Age and High-Growth Entrepreneurship

Pierre Azoulay Benjamin Jones J. Daniel Kim Javier Miranda

in: American Economic Review: Insights, No. 1, 2020

Abstract

Many observers, and many investors, believe that young people are especially likely to produce the most successful new firms. Integrating administrative data on firms, workers, and owners, we study start-ups systematically in the United States and find that successful entrepreneurs are middle-aged, not young. The mean age at founding for the 1-in-1,000 fastest growing new ventures is 45.0. The findings are similar when considering high-technology sectors, entrepreneurial hubs, and successful firm exits. Prior experience in the specific industry predicts much greater rates of entrepreneurial success. These findings strongly reject common hypotheses that emphasize youth as a key trait of successful entrepreneurs.

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Business Dynamics Statistics of High Tech Industries

Nathan Goldschlag Javier Miranda

in: Journal of Economics and Management Strategy, No. 1, 2020

Abstract

Modern market economies are characterized by the reallocation of resources from less productive, less valuable activities to more productive, more valuable ones. Businesses in the High Tech sector play a particularly important role in this reallocation by introducing new products and services that impact the entire economy. In this paper we describe an extension to the Census Bureau’s Business Dynamics Statistics that tracks job creation, job destruction, startups, and exits by firm and establishment characteristics, including sector, firm age, and firm size in the High Tech sector. We preview the resulting statistics, showing the structural shifts in the High Tech sector over the past 30 years, including the surge of entry and young firm activity in the 1990s that reversed abruptly in the early‐2000s.

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Measuring Job Creation, Growth, and Survival among the Universe of Start-ups in the United States Using a Combined Start-up Panel Data Set

Robert W. Fairlie Javier Miranda Nikolas Zolas

in: ILR Review, No. 5, 2019

Abstract

The field of entrepreneurship is growing rapidly and expanding into new areas. This article presents a new compilation of administrative panel data on the universe of business start-ups in the United States, which will be useful for future research in entrepreneurship. To create the US start-up panel data set, the authors link the universe of non-employer firms to the universe of employer firms in the Longitudinal Business Database (LBD). Start-up cohorts of more than five million new businesses per year, which create roughly three million jobs, can be tracked over time. To illustrate the potential of the new start-up panel data set for future research, the authors provide descriptive statistics for a few examples of research topics using a representative start-up cohort.

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Taken by Storm: Business Financing and Survival in the Aftermath of Hurricane Katrina

Emek Basker Javier Miranda

in: Journal of Economic Geography, No. 6, 2018

Abstract

We use Hurricane Katrina’s damage to the Mississippi coast in 2005 as a natural experiment to study business survival in the aftermath of a capital-destruction shock. We find very low survival rates for businesses that incurred physical damage, particularly for small firms and less-productive establishments. Conditional on survival, larger and more-productive businesses that rebuilt their operations hired more workers than their smaller and less-productive counterparts. Auxiliary evidence from the Survey of Business Owners suggests that the differential size effect is tied to the presence of financial constraints, pointing to a socially inefficient level of exits and to distortions of allocative efficiency in response to this negative shock. Over time, the size advantage disappeared and market mechanisms seem to prevail.

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Business Dynamics of Innovating Firms: Linking U.S. Patents with Administrative Data on Workers and Firms

Stuart Graham Cheryl Grim Tariqul Islam Alan Marco Javier Miranda

in: Journal of Economics and Management Strategy, No. 3, 2018

Abstract

This paper discusses the construction of a new longitudinal database tracking inventors and patent-owning firms over time. We match granted patents between 2000 and 2011 to administrative databases of firms and workers housed at the U.S. Census Bureau. We use inventor information in addition to the patent assignee firm name to improve on previous efforts linking patents to firms. The triangulated database allows us to maximize match rates and provide validation for a large fraction of matches. In this paper, we describe the construction of the database and explore basic features of the data. We find patenting firms, particularly young patenting firms, disproportionally contribute jobs to the U.S. economy. We find that patenting is a relatively rare event among small firms but that most patenting firms are nevertheless small, and that patenting is not as rare an event for the youngest firms compared to the oldest firms. Although manufacturing firms are more likely to patent than firms in other sectors, we find that most patenting firms are in the services and wholesale sectors. These new data are a product of collaboration within the U.S. Department of Commerce, between the U.S. Census Bureau and the U.S. Patent and Trademark Office.

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Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown

Ryan A. Decker John Haltiwanger Ron S. Jarmin Javier Miranda

in: American Economic Review: Papers and Proceedings, No. 5, 2017

Abstract

A large literature documents declining measures of business dynamism including high-growth young firm activity and job reallocation. A distinct literature describes a slowdown in the pace of aggregate labor productivity growth. We relate these patterns by studying changes in productivity growth from the late 1990s to the mid 2000s using firm-level data. We find that diminished allocative efficiency gains can account for the productivity slowdown in a manner that interacts with the within-firm productivity growth distribution. The evidence suggests that the decline in dynamism is reason for concern and sheds light on debates about the causes of slowing productivity growth.

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Taking the Leap: The Determinants of Entrepreneurs Hiring Their First Employee

Robert W. Fairlie Javier Miranda

in: Journal of Economics and Management Strategy, No. 1, 2017

Abstract

Job creation is one of the most important aspects of entrepreneurship, but we know relatively little about the hiring patterns and decisions of start‐ups. Longitudinal data from the Integrated Longitudinal Business Database (iLBD), Kauffman Firm Survey (KFS), and the Growing America through Entrepreneurship (GATE) experiment are used to provide some of the first evidence in the literature on the determinants of taking the leap from a nonemployer to employer firm among start‐ups. Several interesting patterns emerge regarding the dynamics of nonemployer start‐ups hiring their first employee. Hiring rates among the universe of nonemployer start‐ups are very low, but increase when the population of nonemployers is focused on more growth‐oriented businesses such as incorporated and employer identification number businesses. If nonemployer start‐ups hire, the bulk of hiring occurs in the first few years of existence. After this point in time, relatively few nonemployer start‐ups hire an employee. Focusing on more growth‐ and employment‐oriented start‐ups in the KFS, we find that Asian‐owned and Hispanic‐owned start‐ups have higher rates of hiring their first employee than white‐owned start‐ups. Female‐owned start‐ups are roughly 10 percentage points less likely to hire their first employee by the first, second, and seventh years after start‐up. The education level of the owner, however, is not found to be associated with the probability of hiring an employee. Among business characteristics, we find evidence that business assets and intellectual property are associated with hiring the first employee. Using data from the largest random experiment providing entrepreneurship training in the United States ever conducted, we do not find evidence that entrepreneurship training increases the likelihood that nonemployers hire their first employee.

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Where Has All the Skewness Gone? The Decline in High-growth (Young) Firms in the U.S.

Ryan A. Decker John Haltiwanger Ron S. Jarmin Javier Miranda

in: European Economic Review, July 2016

Abstract

The pace of business dynamism and entrepreneurship in the U.S. has declined over recent decades. We show that the character of that decline changed around 2000. Since 2000 the decline in dynamism and entrepreneurship has been accompanied by a decline in high-growth young firms. Prior research has shown that the sustained contribution of business startups to job creation stems from a relatively small fraction of high-growth young firms. The presence of these high-growth young firms contributes to a highly (positively) skewed firm growth rate distribution. In 1999, a firm at the 90th percentile of the employment growth rate distribution grew about 31 percent faster than the median firm. Moreover, the 90−50 differential was 16 percent larger than the 50−10 differential reflecting the positive skewness of the employment growth rate distribution. We show that the shape of the firm employment growth distribution changes substantially in the post-2000 period. By 2007, the 90−50 differential was only 4 percent larger than the 50−10, and it continued to exhibit a trend decline through 2011. The overall decline reflects a sharp drop in the 90th percentile of the growth rate distribution accounted for by the declining share of young firms and the declining propensity for young firms to be high-growth firms.

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Declining Business Dynamism: What We Know and the Way Forward

Ryan A. Decker John Haltiwanger Ron S. Jarmin Javier Miranda

in: American Economic Review: Papers and Proceedings, No. 5, 2016

Abstract

A growing body of evidence indicates that the U.S. economy has become less dynamic in recent years. This trend is evident in declining rates of gross job and worker flows as well as declining rates of entrepreneurship and young firm activity, and the trend is pervasive across industries, regions, and firm size classes. We describe the evidence on these changes in the U.S. economy by reviewing existing research. We then describe new empirical facts about the relationship between establishment-level productivity and employment growth, framing our results in terms of canonical models of firm dynamics and suggesting empirically testable potential explanations.

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Private Equity, Jobs, and Productivity

Steven J. Davis John Haltiwanger Kyle Handley Ron S. Jarmin Josh Lerner Javier Miranda

in: American Economic Review, No. 12, 2014

Abstract

Private equity critics claim that leveraged buyouts bring huge job losses and few gains in operating performance. To evaluate these claims, we construct and analyze a new dataset that covers US buyouts from 1980 to 2005. We track 3,200 target firms and their 150,000 establishments before and after acquisition, comparing to controls defined by industry, size, age, and prior growth. Buyouts lead to modest net job losses but large increases in gross job creation and destruction. Buyouts also bring TFP gains at target firms, mainly through accelerated exit of less productive establishments and greater entry of highly productive ones.

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The Role of Entrepreneurship in US Job Creation and Economic Dynamism

Ryan A. Decker John Haltiwanger Ron S. Jarmin Javier Miranda

in: Journal of Economic Perspectives, No. 3, 2014

Abstract

An optimal pace of business dynamics—encompassing the processes of entry, exit, expansion, and contraction—would balance the benefits of productivity and economic growth against the costs to firms and workers associated with reallocation of productive resources. It is difficult to prescribe what the optimal pace should be, but evidence accumulating from multiple datasets and methodologies suggests that the rate of business startups and the pace of employment dynamism in the US economy has fallen over recent decades and that this downward trend accelerated after 2000. A critical factor in accounting for the decline in business dynamics is a lower rate of business startups and the related decreasing role of dynamic young businesses in the economy. For example, the share of US employment accounted for by young firms has declined by almost 30 percent over the last 30 years. These trends suggest that incentives for entrepreneurs to start new firms in the United States have diminished over time. We do not identify all the factors underlying these trends in this paper but offer some clues based on the empirical patterns for specific sectors and geographic regions.

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How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size

Teresa C. Fort John Haltiwanger Ron S. Jarmin Javier Miranda

in: IMF Economic Review, No. 3, 2013

Abstract

There remains considerable debate in the theoretical and empirical literature about the differences in the cyclical dynamics of firms by firm size. This paper contributes to the debate in two ways. First, the key distinction between firm size and firm age is introduced. The evidence presented in this paper shows that young businesses (that are typically small) exhibit very different cyclical dynamics than small/older businesses. The second contribution is to present evidence and explore explanations for the finding that young/small businesses were hit especially hard in the Great Recession. The collapse in housing prices accounts for a significant part of the large decline of young/small businesses in the Great Recession.

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Who Creates Jobs? Small versus Large versus Young

John Haltiwanger Ron S. Jarmin Javier Miranda

in: Review of Economics and Statistics, No. 2, 2013

Abstract

The view that small businesses create the most jobs remains appealing to policymakers and small business advocates. Using data from the Census Bureau's Business Dynamics Statistics and Longitudinal Business Database, we explore the many issues at the core of this ongoing debate. We find that the relationship between firm size and employment growth is sensitive to these issues. However, our main finding is that once we control for firm age, there is no systematic relationship between firm size and growth. Our findings highlight the important role of business start-ups and young businesses in U.S. job creation.

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Towards Unrestricted Public Use Business Microdata: The Synthetic Longitudinal Business Database

John M. Abowd Ron S. Jarmin Satkartar K. Kinney Javier Miranda Jerome P. Reiter Arnold P. Reznek

in: International Statistical Review, No. 3, 2011

Abstract

In most countries, national statistical agencies do not release establishment-level business microdata, because doing so represents too large a risk to establishments’ confidentiality. One approach with the potential for overcoming these risks is to release synthetic data; that is, the released establishment data are simulated from statistical models designed to mimic the distributions of the underlying real microdata. In this article, we describe an application of this strategy to create a public use file for the Longitudinal Business Database, an annual economic census of establishments in the United States comprising more than 20 million records dating back to 1976. The U.S. Bureau of the Census and the Internal Revenue Service recently approved the release of these synthetic microdata for public use, making the synthetic Longitudinal Business Database the first-ever business microdata set publicly released in the United States. We describe how we created the synthetic data, evaluated analytical validity, and assessed disclosure risk.

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Business Volatility, Job Destruction, and Unemployment

Steven J. Davis R. Jason Faberman John Haltiwanger Ron S. Jarmin Javier Miranda

in: American Economic Journal: Macroeconomics, No. 2, 2010

Abstract

Unemployment inflows fell from 4 percent of employment per month in the early 1980s to 2 percent by the mid 1990s. Using low frequency movements in industry-level data, we estimate that a 1 percentage point drop in the quarterly job destruction rate lowers the monthly unemployment inflow rate by 0.28 points. By our estimates, declines in job destruction intensity account for 28 (55) percent of the fall in unemployment inflows from 1982 (1990) to 2005. Slower job destruction accounts for similar fractions of long-term declines in the rate of unemployment.

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Books

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The Promise and Peril of Entrepreneurship

Robert W. Fairlie Zachary Kroff Javier Miranda Nikolas Zolas

in: MIT Press, 2023

Abstract

Startups create jobs and power economic growth. That's an article of faith in the United States—but, as The Promise and Peril of Entrepreneurship reveals, our faith may be built on shaky ground. Economists Robert Fairlie, Zachary Kroff, Javier Miranda, and Nikolas Zolas—working with Census Bureau microdata—have developed a new data set, the Comprehensive Startup Panel, that tracks job creation and the survival of every startup in the country. In doing so, they recalibrate our understanding of how startups behave in the US economy. Specifically, their work seeks to answer three critical questions: How many jobs does each entrepreneur create? Do those jobs disappear quickly? And how long do entrepreneurial enterprises survive?

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Measuring and Accounting for Innovation in the Twenty-First Century

Carol Corrado Jonathan Haskel Javier Miranda Daniel Sichel

in: NBER Studies in Income and Wealth, 2021

Abstract

<span lang="EN-US">Measuring innovation is challenging both for researchers and for national statisticians, and it is increasingly important in light of the ongoing digital revolution. National accounts and many other economic statistics were designed before the emergence of the digital economy and the growing importance of intangible capital. They do not yet fully capture the wide range of innovative activity that is observed in modern economies.<br /> This volume examines how to measure innovation, track its effects on economic activity and prices, and understand how it has changed the structure of production processes, labor markets, and organizational form and operation in business. The contributors explore new approaches to, and data sources for, measurement—such as collecting data for a particular innovation as opposed to a firm, and the use of trademarks for tracking innovation. They also consider the connections between university-based R&amp;D and business startups, and the potential impacts of innovation on income distribution.<br /> The research suggests potential strategies for expanding current measurement frameworks to better capture innovative activity, such as more detailed tracking of global value chains to identify innovation across time and space, and expanding the measurement of the GDP impacts of innovation in fields such as consumer content delivery and cloud computing.</span>

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Measuring Entrepreneurial Businesses: Current Knowledge and Challenges

John Haltiwanger Erik Hurst Javier Miranda Antoinette Schoar

in: NBER Studies in Income and Wealth, 2017

Abstract

Start-ups and other entrepreneurial ventures make a significant contribution to the US economy, particularly in the tech sector, where they comprise some of the largest and most influential companies. Yet for every startup that becomes a high-profile, high-growth company like Apple, Facebook, Microsoft, and Google, many more fail. This enormous heterogeneity poses conceptual and measurement challenges for economists concerned with understanding how new businesses affect economic growth.

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The Investment Strategies of Sovereign Wealth Funds

Shai B. Bernstein Josh Lerner Antoinette Schoar

in: Journal of Economic Perspectives, No. 2, 2013

Abstract

Sovereign wealth funds have emerged as major investors in corporate and real resources worldwide. After an overview of their magnitude, we consider the institutional arrangements under which many of the sovereign wealth funds operate. We focus on a specific set of agency problems that is of first-order importance for these funds: that is, the direct involvement of political leaders in the management process. We show that sovereign wealth funds with greater involvement of political leaders in fund management are associated with investment strategies that seem to favor short-term economic policy goals in their respective countries at the expense of longer-term maximization of returns. Sovereign wealth funds face several other issues, like how best to cope with demands for transparency, which can allow others to copy their investment strategies, and how to address the problems that arise with sheer size, like the difficulties of scaling up investment strategies that only work with a smaller value of assets under investment. In the conclusion, we discuss how various approaches cultivated by effective institutional investors worldwide -- from investing in the best people to pioneering new asset classes to compartmentalizing investment activities -- may provide clues as to how sovereign wealth funds might address these issues.&nbsp;

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Working Papers

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Credit Card Entrepreneurs

Ufuk Akcigit Raman Chhina Seyit Cilasun Javier Miranda Nicolas Serrano-Velarde

in: IWH Discussion Papers, No. 5, 2025

Abstract

<p>Utilizing near real-time QuickBooks data from over 1.6 million small businesses and a targeted survey, this paper highlights the critical role credit card financing plays for small business activity. We examine a two year period beginning in January of 2021. A turbulent period during which, credit card usage by small U.S. businesses nearly doubled, interest payments rose by 60%, and delinquencies reached 2.8%. We find, first, monthly credit card payments were up to three times higher than loan payments during this time. Second, we use targeted surveys of these small businesses to establish credit cards as a key financing source in response to firm-level shocks, such as uncertain cash flows and overdue invoices. Third, we establish the importance of credit cards as an important financial transmission mechanism. Following the Federal Reserve’s rate hikes in early 2022, banks cut credit card supply, leading to a 15.75% drop in balances and a 10% decline in revenue growth, as well as a 1.5% decrease in employment growth among U.S. small businesses. These higher rates also rendered interest payments unsustainable for many, contributing to half of the observed increase in delinquencies. Lastly, a simple heterogeneous firm model with a cash-in-hand constraint illustrates the significant macroeconomic impact of credit card financing on small business activity.</p>

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Declining Job Reallocation in Europe: The Role of Shocks, Market Power, and Technology

Filippo Biondi Sergio Inferrera Matthias Mertens Javier Miranda

in: IWH Discussion Papers, No. 19, 2023

Abstract

<p>We study changes in job reallocation in Europe after 2000 using novel microaggregated data that we collected for 19 European countries. In all countries, we document broad-based declines in job reallocation rates that concern most economic sectors and size classes. These declines are mainly driven by dynamics within sectors, size, and age classes rather than by compositional changes. Simultaneously, employment shares of young firms decline. Consistent with US evidence, firms’ employment has become less responsive to productivity shocks. However, the dispersion of firms’ productivity shocks has decreased too. To enhance our understanding of these patterns, we derive and apply a firm-level framework that relates changes in firms’ market power, labor market imperfections, and production technology to firms’ responsiveness and job reallocation. Using German firm-level data, we find that changes in markups and labor output elasticities, rather than adjustment costs, are key in rationalizing declining responsiveness.</p>

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Intuit QuickBooks Small Business Index: A New Employment Series for the US, Canada, and the UK

Ufuk Akcigit Raman Chhina Seyit Cilasun Javier Miranda Eren Ocakverdi Nicolas Serrano-Velarde

in: IWH Discussion Papers, No. 9, 2023

Abstract

Small and young businesses are essential for job creation, innovation, and economic growth. Even most of the superstar firms start their business life small and then grow over time. Small firms have less internal resources, which makes them more fragile and sensitive to macroeconomic conditions. This suggests the need for frequent and real-time monitoring of the small business sector’s health. Previously this was difficult due to a lack of appropriate data. This paper fills this important gap by developing a new Intuit QuickBooks Small Business Index that focuses on the smallest of small businesses with at most 9 workers in the US and the UK and at most 19 workers in Canada. The Index aggregates a sample of anonymous Quick- Books Online Payroll subscriber data (QBO Payroll sample) from 333,000 businesses in the US, 66,000 in Canada, and 25,000 in the UK. After comparing the QBO Payroll sample data to the official statistics, we remove the seasonal components and use a Flexible Least Squares method to calibrate the QBO Payroll sample data against official statistics. Finally, we use the estimated model and the QBO Payroll sample data to generate a near real-time index of economic activity. We show that the estimated model performs well both in-sample and out-of-sample. Additionally, we use this analysis for different regions and industries. Keywords:

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Topics

Productivity Startups and Entrepreneurship
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