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The Evolution of the Firm Size Distribution and Nationality of Ownerhship

Author

Listed:
  • Eric Strobl

    (Université catholique de Louvain)

  • Holger Gorg

    (University of Nottingham)

  • Salvador Barrios

    (Université catholique de Louvain)

Abstract

It has recently been shown that the firm size distribution is initially skewed to the right and then evolves over time to become more lognormal, and argued that this is likely due to firms initially facing financial constraints, see Cabral and Mata(2003). We conjecture that, if this is true, then such a pattern should be much less apparent for multinational companies for which financial constraints are generally considered to be lower than non-multinationals. Moreover, such a difference should be re-enforced by the fact that multinationals are less likely to face selection issues. These propositions are confirmed using plant level Irish manufacturing data.

Suggested Citation

  • Eric Strobl & Holger Gorg & Salvador Barrios, 2005. "The Evolution of the Firm Size Distribution and Nationality of Ownerhship," Economics Bulletin, AccessEcon, vol. 12(1), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-05l60001
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    References listed on IDEAS

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    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
    2. John Sutton, 1996. "Gibrats Legacy," STICERD - Economics of Industry Papers 14, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    3. Robert E. Baldwin & Robert E. Lipsey & J. David Richardson, 1998. "Geography and Ownership as Bases for Economic Accounting," NBER Books, National Bureau of Economic Research, Inc, number bald98-1, March.
    4. Luís M B Cabral & José Mata, 2003. "On the Evolution of the Firm Size Distribution: Facts and Theory," American Economic Review, American Economic Association, vol. 93(4), pages 1075-1090, September.
    5. Ann E. Harrison & Margaret S. McMillan, 2022. "Does direct foreign investment affect domestic credit constraints?," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 7, pages 153-180, World Scientific Publishing Co. Pte. Ltd..
    6. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    7. Ann E. Harrison & Inessa Love & Margaret S. McMillan, 2022. "Global capital flows and financing constraints," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 8, pages 181-213, World Scientific Publishing Co. Pte. Ltd..
    8. Sourafel Girma & David Greenaway & Katharine Wakelin, 2013. "Who Benefits from Foreign Direct Investment in the UK?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(5), pages 560-574, November.
    9. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258, National Bureau of Economic Research, Inc.
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    12. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
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    Cited by:

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    2. Jörn Kleinert, 2021. "Organizational capital, technological choice, and firm productivity," Graz Economics Papers 2021-03, University of Graz, Department of Economics.
    3. Luís Cabral, 2007. "Small firms in Portugal: a selective survey of stylized facts, economic analysis, and policy implications," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 6(1), pages 65-88, April.

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    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • F2 - International Economics - - International Factor Movements and International Business

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