Advanced Search
MyIDEAS: Login to save this paper or follow this series

Corporate performances and market selection. Some comparative evidence

Contents:

Author Info

  • Giulio Bottazzi

    ()
    (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies)

  • Giovanni Dosi

    (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies)

  • Nadia Jacoby

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Angelo Secchi

    (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies)

  • Federico Tamagni

    (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies)

Abstract

Diverse theories of industry dynamics predict heterogeneity in production efficiency to be the driver of firms' growth, survival and industrial change, either through a direct link between efficiency and growth, or through an indirect effect via profitabilities, as more productive firms can enjoy higher profit margins which, under imperfect capital markets, allow them to invest and grow more. Does the empirical evidence bear such predictions? This paper explores the dynamics of selection and reallocation through an investigation of the productivity-profitability-growth relations at the firm level. Exploiting large panels of Italian and French industrial firms, we find that heterogeneity in efficiencies primarily yield persistent profitability differentials, whereas the relationships of corporate growth with either productivity or profitability appear much weaker, if at all existent. This suggests that selection forces are much less strong than usually assumed. Rather, the links between efficiency and corporate growth seem profoundly mediated by large degrees of behavioural freedom. The results robustly applies across different industrial sectors and across the two countries.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. 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://hal.archives-ouvertes.fr/docs/00/42/21/42/PDF/BoDoJaSeTa_LEM_WP.pdf
Download Restriction: no

Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00422142.

as in new window
Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:hal:cesptp:hal-00422142

Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00422142
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

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.:
as in new window
  1. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 38(3), pages 569-594, September.
  2. Alex Coad & Tom Broekel, 2012. "Firm growth and productivity growth: evidence from a panel VAR," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 44(10), pages 1251-1269, April.
  3. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth. Lessons from Microeconomic Evidence," NBER Chapters, National Bureau of Economic Research, Inc, in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
  4. Giulio Bottazzi & Marco Grazzi & Angelo Secchi, 2005. "Characterizing the Production Process: A Disaggregated Analysis of Italian Manufacturing Firms," Rivista di Politica Economica, SIPI Spa, SIPI Spa, vol. 95(1), pages 291-318, January-F.
  5. Geroski, Paul A, 1998. "An Applied Econometrician's View of Large Company Performance," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1862, C.E.P.R. Discussion Papers.
  6. Giovanni Dosi & Marco Grazzi, 2005. "Technology as Problem-Solving Procedures and Technology as Input-Output Relations: Some Perspectives on the Theory of Production," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2005/26, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  7. Sanghoon Ahn, 2001. "Firm Dynamics and Productivity Growth: A Review of Micro Evidence from OECD Countries," OECD Economics Department Working Papers 297, OECD Publishing.
  8. Martin N. Baily & Eric J. Bartelsman & John Haltiwanger, 1994. "Downsizing and productivity growth: myth or reality?," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 94-7, Board of Governors of the Federal Reserve System (U.S.).
  9. Coad, Alex & Rao, Rekha & Tamagni, Federico, 2011. "Growth processes of Italian manufacturing firms," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 22(1), pages 54-70, February.
  10. John R. Baldwin & Wulong Gu, 2002. "Plant Turnover and Productivity Growth in Canadian Manufacturing," OECD Science, Technology and Industry Working Papers 2002/2, OECD Publishing.
  11. Giulio Bottazzi & Giovanni Dosi & Gaia Rocchetti, 2001. "Modes of Knowledge Accumulation, Entry Regimes and Patterns of Industrial Evolution," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2001/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  12. Griliches, Zvi & Regev, Haim, 1995. "Firm productivity in Israeli industry 1979-1988," Journal of Econometrics, Elsevier, Elsevier, vol. 65(1), pages 175-203, January.
  13. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 5(3-4), pages 287-320.
  14. Bottazzi, Giulio & Grazzi, Marco & Secchi, Angelo, 2005. "Input output scaling relations in Italian manufacturing firms," Physica A: Statistical Mechanics and its Applications, Elsevier, Elsevier, vol. 355(1), pages 95-102.
  15. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3381, C.E.P.R. Discussion Papers.
  16. Foster, Lucia & Haltiwanger, John C. & Syverson, Chad, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," IZA Discussion Papers 1705, Institute for the Study of Labor (IZA).
  17. Baldwin, John R. & Harchaoui, Tarek, 2002. "Productivity Growth in Canada," Productivity Growth in Canada, Statistics Canada, Economic Analysis, Statistics Canada, Economic Analysis, number stcb6e, December.
  18. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2003. "Comparative Analysis of Firm Demographics and Survival: Micro-Level Evidence for the OECD Countries," OECD Economics Department Working Papers 348, OECD Publishing.
  19. Geroski, Paul A & Machin, Stephen & Walters, Christopher F, 1997. "Corporate Growth and Profitability," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 45(2), pages 171-89, June.
  20. Giulio Bottazzi & Angelo Secchi & Federico Tamagni, 2006. "Productivity, Profitability and Financial Fragility: Evidence from Italian Business Firms," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2006/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  21. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 51(1), pages 91-112, 03.
  22. Dosi Giovanni & Gambardella Alfonso & Grazzi Marco & Orsenigo Luigi, 2008. "Technological Revolutions and the Evolution of Industrial Structures: Assessing the Impact of New Technologies upon the Size and Boundaries of Firms," Capitalism and Society, De Gruyter, De Gruyter, vol. 3(1), pages 1-49, June.
  23. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, Elsevier, vol. 13(6), pages 343-373, December.
  24. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 36(4), pages 1947-1982, December.
  25. Silverberg, Gerald & Dosi, Giovanni & Orsenigo, Luigi, 1988. "Innovation, Diversity and Diffusion: A Self-organisation Model," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 98(393), pages 1032-54, December.
  26. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, Econometric Society, vol. 60(5), pages 1127-50, September.
  27. Alex Coad, 2005. "Testing the Principle of "Growth of the Fitter": The Relationship between Profits and Firm Growth," Emory Economics, Department of Economics, Emory University (Atlanta) 0531, Department of Economics, Emory University (Atlanta).
  28. Ericson, Richard & Pakes, Ariel, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 62(1), pages 53-82, January.
  29. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, Econometric Society, vol. 50(3), pages 649-70, May.
  30. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, Elsevier, edition 1, volume 1, number 1.
  31. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 26(3), pages 1120-71, September.
  32. Nelson, Richard R, 1981. "Research on Productivity Growth and Productivity Differences: Dead Ends and New Departures," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 19(3), pages 1029-64, September.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Nanditha Mathew, 2013. "Drivers of Firm Growth: Micro-evidence from Indian Manufacturing," Discussion Papers, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy 2013/161, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  2. Giovanni Dosi, 2012. "Economic Coordination and Dynamics: Some Elements of an Alternative "Evolutionary" Paradigm," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2012/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  3. Giorgio Barba Navaretti & Davide Castellani & Fabio Pieri, 2012. "Age and firm growth. Evidence from three European countries," Working Papers, Department of Applied Economics II, Universidad de Valencia 1217, Department of Applied Economics II, Universidad de Valencia.
  4. Marco Grazzi, 2012. "Export and Firm Performance: Evidence on Productivity and Profitability of Italian Companies," Journal of Industry, Competition and Trade, Springer, Springer, vol. 12(4), pages 413-444, December.
  5. repec:hal:wpaper:hal-00611862 is not listed on IDEAS
  6. Cédric Durand & Antonia Lòpez-Villavicencio, 2011. "On the link between distribution's margins and exchange rates: the role of globalization," CEPN Working Papers, HAL hal-00611862, HAL.
  7. Giovanni Dosi & Daniele Moschella & Emanuele Pugliese & Federico Tamagni, 2013. "Productivity, market selection and corporate growth: comparative evidence across US and Europe," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2013/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  8. John Baldwin & Amélie Lafrance, 2014. "Firm Turnover and Productivity Growth in Canadian Manufacturing and Services Industries, 2000 to 2007," Journal of Industry, Competition and Trade, Springer, Springer, vol. 14(2), pages 173-205, June.
  9. Altomonte, Carlo & Nicolini, Marcella, 2012. "Economic integration and the dynamics of firms’ competitive behavior," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 23(4), pages 383-402.
  10. Giulio Bottazzi & Marco Grazzi, 2013. "Dynamics of productivity and cost of labor in Italian Manufacturing firms," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2013/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  11. Giovanni Dosi & Marco Grazzi & Chiara Tomasi & Alessandro Zeli, 2010. "Turbulence underneath the big calm? Exploring the micro-evidence behind the flat trend of manufacturing productivity in Italy," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2010/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  12. Lee, Sanghoon, 2014. "The relationship between growth and profit: evidence from firm-level panel data," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 28(C), pages 1-11.
  13. Giovanni Dosi & Marco Grazzi & Chiara Tomasi & Alessandro Zeli, 2012. "Turbulence underneath the big calm? The micro-evidence behind Italian productivity dynamics," Small Business Economics, Springer, Springer, vol. 39(4), pages 1043-1067, November.
  14. Stefano Bianchini & Giulio Bottazzi & Federico Tamagni, 2014. "What does (or does not) determine persistent corporate high-growth ?," LEM Papers Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy 2014/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:hal-00422142. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.