Recessions Don't Spark More Startups

Do bad economic times mean a surge of new businesses? Not at all, according to a study by Dane Stangler and Paul Kedrosky released today by the Kauffman Foundation. Exploring Firm Formation: Why Is the Number of New Firms Constant? shows factors that might bear on prospective entrepreneurs’ decisions to form new companies—recessions, expansions, tax changes, population growth, scarce or abundant capital, technological advances—has little impact on the pace of U.S. startups. In fact, the study, which used firm formation datasets from the Census Bureau, Small Business Administration, and Bureau of Labor Statistics, shows the annual number of new companies founded in the U.S. remains steady from year to year. More from the press release:

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