Journal of Economic Growth

, Volume 14, Issue 1, pp 1–25 | Cite as

Volatility and firm growth

  • Alberto Chong
  • Mark Gradstein


A growing body of macroeconomic evidence suggests that volatility is detrimental for economic growth. The channel through which this materializes, however, is less clear. Moreover, substantive evidence based on disaggregate data is scarce. In this paper, we provide empirical support for this relationship using a detailed cross-country firm-level dataset. We also provide additional evidence that institutional obstacles magnify the adverse effect of perceived volatility on firm growth.


Firm growth Policy volatility Institutions 

JEL Classification

E60 H11 O11 


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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Inter-American Development BankWashingtonUSA
  2. 2.Ben Gurion UniversityBeer-shebaIsrael

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