This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Dynamics of the Growth of Firms: Evidence from the Services Sector

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Blandina Oliveira () (ESTG, Instituto Politécnico de Leiria)
Adelino Fortunato () (GEMF and Faculdade de Economia, Universidade de Coimbra)

Additional information is available for the following registered author(s):

Abstract

Using a dynamic panel data model with serial correlation in the error term, the purpose of this paper is to examine if Gibrat’s law can be rejected for the services sector as it has been for manufacturing. The aim of this paper is also to improve the understanding of the empirical determinants of firm growth by extending the literature to include a new variable related to foreign participation. In addition, and based on recent developments in the growth of firms, our analysis also includes the role of the financial structure. The sample used is an unbalanced panel data set that includes all size classes, including the smallest surviving firms, from the Portuguese service sector over the period from 1995 to 2001. Applying the GMM-system and pooled OLS estimators our findings suggest that Gibrat’s law is rejected for services firms. In addition, the results also indicate that firm growth is mainly explained by firm size and age. These results have significant policy implications.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://gemf.fe.uc.pt/workingpapers/pdf/2006/gemf06_01.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2005-04.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 36 pages
Date of creation: 2005
Date of revision:
Publication status: Forthcoming in Empirica
Handle: RePEc:gmf:wpaper:2005-04

Contact details of provider:
Postal: Av. Dias da Silva, 165, 3004-512 COIMBRA
Fax: +351 239 403511
Email:
Web page: http://gemf.fe.uc.pt/index_en.htm
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Carlos Carreira).

Related research
Keywords: Firm growth; Panel data; GMM estimators; Services;

Other versions of this item:

Find related papers by JEL classification:
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
L80 - Industrial Organization - - Industry Studies: Services - - - General

References listed on IDEAS
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. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February. [Downloadable!] (restricted)
    Other versions:
  2. R. Piergiovanni & E. Santarelli & L. Klomp & A.R. Thurik, 2002. "Gibrat's Law and the Firm Size / Firm Growth Relationship in Italian Services," Tinbergen Institute Discussion Papers 02-080/3, Tinbergen Institute. [Downloadable!]
  3. John T. Addison & C. R. Barrett & W. S. Siebert, 2005. "Building Blocks in the Economics of Mandates," IZA Discussion Papers 1866, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Han T.J. Smit, 1997. "Investment Analysis of Offshore Concessions in the Netherlands," Financial Management, Financial Management Association, vol. 26(2), Summer.
  5. John T. Addison & Christopher J. Surfield, 2005. "‘Atypical Work’ and Compensation," GEMF Working Papers 2005-14, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
    Other versions:
  6. Variyam, Jayachandran N. & Kraybill, David S., 1992. "Empirical evidence on determinants of firm growth," Economics Letters, Elsevier, vol. 38(1), pages 31-36, January. [Downloadable!] (restricted)
  7. Gorg, Holger & Strobl, Eric, 2001. "Multinational Companies and Productivity Spillovers: A Meta-analysis," Economic Journal, Royal Economic Society, vol. 111(475), pages F723-39, November. [Downloadable!] (restricted)
  8. Harris, Milton & Raviv, Artur, 1991. " The Theory of Capital Structure," Journal of Finance, American Finance Association, vol. 46(1), pages 297-355, March. [Downloadable!] (restricted)
  9. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter. [Downloadable!] (restricted)
    Other versions:
  10. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May. [Downloadable!] (restricted)
  11. Elston, Julie Ann, 2002. "An Examination of the Relationship Between Firm Size, Growth and Liquidity in the Neuer Markt," Discussion Paper Series 1: Economic Studies 2002,15, Deutsche Bundesbank, Research Centre. [Downloadable!]
  12. Thomas F. Cooley & Vincenzo Quadrini, 2001. "Financial Markets and Firm Dynamics," American Economic Review, American Economic Association, vol. 91(5), pages 1286-1310, December. [Downloadable!] (restricted)
    Other versions:
  13. G. Urga & P. A. Geroski & S. Lazarova & C. F. Walters, 2003. "Are differences in firm size transitory or permanent?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 47-59. [Downloadable!]
    Other versions:
  14. Tschoegl, Adrian E, 1983. "Size, Growth, and Transnationality among the World's Largest Banks," Journal of Business, University of Chicago Press, vol. 56(2), pages 187-201, April. [Downloadable!] (restricted)
  15. Blonigen, Bruce A. & Tomlin, KaSaundra, 2001. "Size and growth of Japanese plants in the United States," International Journal of Industrial Organization, Elsevier, vol. 19(6), pages 931-952, May. [Downloadable!] (restricted)
  16. D.B. Audretsch & L. Klomp & E. Santarelli & A.R. Thurik, 2004. "Gibrat's Law: Are the Services Different?," Review of Industrial Organization, Springer, vol. 24(3), pages 301-324, 05. [Downloadable!]
    Other versions:
  17. Mata, Jose, 1994. " Firm Growth during Infancy," Small Business Economics, Springer, vol. 6(1), pages 27-39, February.
  18. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932.
  19. Jong-Rong Chen & Wen-Cheng Lu, 2003. "Panel unit root tests of firm size and its growth," Applied Economics Letters, Taylor and Francis Journals, vol. 10(6), pages 343-345, April. [Downloadable!] (restricted)
  20. Pfaffermayr, Michael & Bellak, Christian, 2000. "Why Foreign-Owned Firms are Different: A Conceptual Framework and Empirical Evidence for Austria," Discussion Paper Series 26372, Hamburg Institute of International Economics. [Downloadable!]
  21. Dunne, Timothy & Roberts, Mark J & Samuelson, Larry, 1989. "The Growth and Failure of U.S. Manufacturing Plants," The Quarterly Journal of Economics, MIT Press, vol. 104(4), pages 671-98, November. [Downloadable!] (restricted)
    Other versions:
  22. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-74, August. [Downloadable!] (restricted)
    Other versions:
  23. Peter E. Hart, Nicholas Oulton, 1999. "Gibrat, Galton and Job Generation," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 6(2), pages 149-164, July. [Downloadable!] (restricted)
  24. Chesher, Andrew, 1979. "Testing the Law of Proportionate Effect," Journal of Industrial Economics, Blackwell Publishing, vol. 27(4), pages 403-11, June. [Downloadable!] (restricted)
  25. John T. Addison & Paulino Teixeira, 2001. "Technology, Employment and Wages," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 15(2), pages 191-219, 06. [Downloadable!] (restricted)
  26. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August. [Downloadable!] (restricted)
    Other versions:
  27. Goddard, John & Wilson, John & Blandon, Peter, 2002. "Panel tests of Gibrat's Law for Japanese manufacturing," International Journal of Industrial Organization, Elsevier, vol. 20(3), pages 415-433, March. [Downloadable!] (restricted)
  28. Hart, Peter E & Oulton, Nicholas, 1996. "Growth and Size of Firms," Economic Journal, Royal Economic Society, vol. 106(438), pages 1242-52, September. [Downloadable!] (restricted)
    Other versions:
  29. John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2005. "Works Councils in the Production Process," GEMF Working Papers 2005-12, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
    Other versions:
  30. Das, Sanghamitra, 1995. "Size, age and firm growth in an infant industry: The computer hardware industry in India," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 111-126, March. [Downloadable!] (restricted)
  31. Pedro Bação & Fernando Alexandre & Vasco J. Gabriel, 2006. "On the stability of the wealth effect," Computing in Economics and Finance 2006 281, Society for Computational Economics.
    Other versions:
  32. Goddard, John & Molyneux, Phil & Wilson, John O S, 2004. "Dynamics of Growth and Profitability in Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(6), pages 1069-90, December.
Full references

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. Horácio Faustino & Nuno Carlos Leitão, 2005. "The Intra Industry Trade between Portugal European Union, Portugal Spain, Portugal-France, Portugal Germany, Portugal-Ireland, Portugal-Greece and Portugal-Netherlands - a Dynamic Panel Data Analysis ," ERSA conference papers ersa05p23, European Regional Science Association. [Downloadable!]
Statistics
Access and download statistics

Did you know? Apart from a small start up grant in the 1990's, RePEc has received no funding and lives on the help of volunteers.

This page was last updated on 2009-11-16.


This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.