Demand Fluctuations and Firm Heterogeneity
AbstractThis paper reports evidence supporting the hypothesis that production flexibility is one of the forces that explain differences in the distribution of firm sizes across industries. Using a data set composed of annual observations on 163 four-digit manufacturing industries over the period 1978-88, the authors find a negative relationship between market share and sales variability. This empirical result suggests that large and small fir ms each have their own efficiency niches. While large firms enjoy the advantage of static production efficiency, the flexible production technologies of small firms enable them to respond better to changin g demand conditions. Copyright 1993 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Industrial Economics.
Volume (Year): 41 (1993)
Issue (Month): 1 (March)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821
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- Josep Mª Argilés Bosch & Josep García Blandón, 2011. "The influence of size on cost behaviour associated with tactical and operational flexibility," Estudios de Economia, University of Chile, Department of Economics, vol. 38(2 Year 20), pages 419-455, December.
- Weiss, Christoph R., 2001. "On flexibility," Journal of Economic Behavior & Organization, Elsevier, vol. 46(3), pages 347-356, November.
- Renner, Swetlana & Pieniadz, Agata, 2008. "Conceptualisation of family farms’ flexibility," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44126, European Association of Agricultural Economists.
- Dhawan, Rajeev, 2001. "Firm size and productivity differential: theory and evidence from a panel of US firms," Journal of Economic Behavior & Organization, Elsevier, vol. 44(3), pages 269-293, March.
- Renner, Swetlana & Glauben, Thomas & Hockmann, Heinrich, 2012. "Measurement And Decomposition Of Flexibility Of Multi-Output Firms," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 124865, International Association of Agricultural Economists.
- Weiss, Christoph R., 1999. "Flexibility In Agriculture," 1999 Annual meeting, August 8-11, Nashville, TN 21502, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Antoci, A. & Sacco, P.L. & Scarpa, C., 2005. "Flexibility choices and oligopolistic competition in an evolutionary environment," Journal of Economic Dynamics and Control, Elsevier, vol. 29(10), pages 1643-1671, October.
- Buschle, Nicole-Barbara, 2002. "Der Einfluß von Konsumenten auf die Determinanten wirtschaftlicher Entwicklung: Ein evolutorisches Simulationsmodell," Dresden Discussion Paper Series in Economics 03/02, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
- Zimmermann, Klaus F., 1995. "Flexibility in the face of demand fluctuations: Employment, capacity utilization, and industry structure," International Journal of Industrial Organization, Elsevier, vol. 13(2), pages 179-193.
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