Firm dynamics

Firm dynamics tell us a lot about the Austrian economy. Corporate insolvencies are one aspect of business exit dynamics and can provide important insights into economic adjustment processes. In recent years, more firms have entered the Austrian market than left, either through market exit or insolvency. As a result, the number of firms has grown considerably over the period under review (from 2019). Viewed over a longer term, the insolvency rate has remained at around 1% since 2019, with the exception of the pandemic years, when insolvency rates were particularly low.

The OeNB has a database that can be used to quantify key aspects of firm dynamics. Conventional insolvency statistics for Austria primarily report absolute insolvency numbers. While these show how many insolvency proceedings have been registered, they do not compare this number with the total number of existing firms, which also changes over time. By contrast, the OeNB firm dynamics dashboard shows insolvencies in relation to a population of total firms that is consistently defined over time, yielding representative insolvency rates.

Integrated Firm-Level Database (IFLD) as data basis

To calculate insolvency rates, we need a suitable data basis. That is why the OeNB has created the Integrated Firm-Level Database (IFLD), providing the basis for the dashboard. The key innovation is that the IFLD links previously fragmented information on firm characteristics, financial statements, bank lending, ownership and insolvencies within clearly defined firm populations.