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Downsizing in German Chemical Manufacturing Industry during the 1990s: Why Small Is Beautiful?

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Author Info
Oleg Badunenko

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Abstract

German chemical manufacturing industry is marked by two major structural changes during 1992-2004. Firstly, number of firms was ranging extensively: from 676 to 901, while only 96 firms represented balanced panel. Secondly, size of the firm dropped considerably-by 88%. This paper is intended to shed light on both phenomena. Based on reliable census data analysis suggests the former evidence be explained (i) by persistent poor performance of firms and (ii) by so called "general purpose technology" argument. The latter phenomenon was found to be a rational behaviour because numerous firms continually operated under decreasing returns to scale.

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Publisher Info
Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 722.

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Length: 35 p.
Date of creation: 2007
Date of revision:
Publication status: Forthcoming in: Small Business Economics (2008)
Handle: RePEc:diw:diwwpp:dp722

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Related research
Keywords: DEA; technical and scale efficiency; technological change; firm size; firm level data; chemical manufacturing;

Find related papers by JEL classification:
D21 - Microeconomics - - Production and Organizations - - - Firm Behavior
L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology

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References listed on IDEAS
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  12. Daouia, Abdelaati & Simar, Leopold, 2007. "Nonparametric efficiency analysis: A multivariate conditional quantile approach," Journal of Econometrics, Elsevier, vol. 140(2), pages 375-400, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alexander Schiersch, 2008. "German engineering firms during the 1990’s. How efficient are export champions?," Working Papers 006, Hanseatic University, Germany, Department of Economics. [Downloadable!]
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