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Firm dynamics by age and size classes and the choice of size measure
[A unified theory of firm selection and growth]

Author

Listed:
  • Stelios Giannoulakis
  • Plutarchos Sakellaris

Abstract

The relationship of firm size and age to its growth and survival differs depending on whether the size is measured by sales or employment. Using a large dataset of Greek firms over the period 1999–2014, we find the following patterns. Controlling for age, there is a strong negative growth–size relationship when measuring size with sales, but a strong positive one when measuring size with employment. Controlling for size, there is a positive monotonic survival–age relationship when measuring size with sales, whereas survival is negatively related with age for young firms when we measure size with employment. Our results indicate that public policies aimed at supporting SMEs should be specialized to the employment scale and the sales scale of enterprises, separately.

Suggested Citation

  • Stelios Giannoulakis & Plutarchos Sakellaris, 2022. "Firm dynamics by age and size classes and the choice of size measure [A unified theory of firm selection and growth]," Oxford Economic Papers, Oxford University Press, vol. 74(4), pages 1077-1109.
    • Handle: RePEc:oup:oxecpp:v:74:y:2022:i:4:p:1077-1109.
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    File URL: http://hdl.handle.net/10.1093/oep/gpab061
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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