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Growing like mushrooms? Sectoral evidence from four large European economies

In: Schumpeterian Perspectives on Innovation, Competition and Growth

Author

Listed:
  • Carolina Castaldi

    (Utrecht University)

  • Sandro Sapio

    (University of Napoli “Parthenope”
    Sant’Anna School of Advanced Studies)

Abstract

This paper follows a stream of literature on the empirics of sectoral growth rates, originated by Castaldi and Dosi (Income levels and income growth. Some new cross-country evidence and some interpretative puzzles. LEM Working Paper 2004-18, Sant’Anna School of Advanced Studies, Pisa, Italy,2004) on two-digit international manufacturing and service sectors, and by Sapio and Thoma’s (The growth of industrial sectors: theoretical insights and empirical evidence from U.S. manufacturing. LEM Working Paper 2006-09, Sant’Anna School of Advanced Studies, Pisa, Italy,2006) study on four-digit U.S. manufacturing industries. Our aim is to discuss the statistical properties of growth rates in light of a ’mushroom vision’ of growth. In our analysis, we focus on the growth of value added in NACE five-digit sectors in France, Germany, Italy and the United Kingdom between 1995 and 2003. We find that the volatility of sectoral growth rates is negatively correlated with sectoral size, according to a power law, but with steeper slopes than for firms and U.S. sectors. Rescaled sectoral growth rates are well-described by a Laplace distribution in most years. The outcomes of this statistical analysis provide a further empirical foundation to a view of sectoral growth, wherein inter-firm correlations, market concentration, and inter-sectoral feedbacks play a major role.

Suggested Citation

  • Carolina Castaldi & Sandro Sapio, 2009. "Growing like mushrooms? Sectoral evidence from four large European economies," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 239-257, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-93777-7_14
    DOI: 10.1007/978-3-540-93777-7_14
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    More about this item

    Keywords

    Sectoral growth; Subbotin distribution; Scaling; Manufacturing; Europe;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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