Institutional Effects on the Evolution of the Size Distribution of Firms
AbstractIn this paper it is argued that the size distribution of firms may largely be determined by institutional factors. This hypothesis is tested in an exploratory fashion by studying the evolution of the size distribution of firms over time in Sweden for a period spanning from the late 1960s to the early 1990s. The data used is divided into finer size classes compared to most previous studies. This gives more scope for investigating the impact of institutions. Moreover, we use a unique data set, starting in 1984, to take account of corporate groups and government ownership. The analysis shows a poor development for intermediate-sized (10-199 employees) firms. This is likely to reflect the existence of a threshold that many firms are either unwilling or unable to cross. The analysis of the institutions and rules of the game determining the entrepreneurial and business conditions in Sweden indicate that the conditions have been unfavorable for small firms, and hence that too few small firms have managed to grow out of the smallest size classes. The conclusion is supported by an international comparison of the number of firms in different size classes. Data indicate that Sweden has fewer small (10-99) employees), and more large (500+) firms per capita than other European countries.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 497.
Length: 20 pages
Date of creation: 01 Mar 1998
Date of revision:
Publication status: Published in Small Business Economics, 1999, pages 13.
Note: Published in Small Business Economics, Vol. 12, No. 1, 1999.
Contact details of provider:
Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Business taxation; Industrial policy; Industrial structure; Size distribution;
Other versions of this item:
- Henrekson, Magnus & Johansson, Dan, 1999. " Institutional Effects on the Evolution of the Size Distribution of Firms," Small Business Economics, Springer, vol. 12(1), pages 11-23, February.
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
This paper has been announced in the following NEP Reports:
- NEP-PUB-1998-04-27 (Public Finance)
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