Industry Dynamics and the Distribution of Firm Sizes: A Non-Parametric Approach
AbstractThe aim of this paper is to analyze the evolution of the size distribution of young firms within some selected industries, trying to assess the empirical implications of different models of industry dynamics: the model of passive learning (Jovanovic 1982), the model of active learning (Ericson and Pakes, 1995), and the evolutionary model (Audretsch, 1995). We use a non-parametric technique, the Kernel density estimator, applied to a data set from the Italian National Institute for Social Security (INPS), consisting in 12 cohorts of new manufacturing firms followed for 6 years. Since the patterns of convergence to the limit distribution are different between industries, we conclude that the model of passive learning is consistent with some of them, the active exploration model with others, the evolutionary model with all of them.
Download InfoIf 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.
Bibliographic InfoPaper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2001/14.
Date of creation: 25 Dec 2001
Date of revision:
Cohorts; Gibrats Law; Kernel; Industry Dynamics; Non-parametric; Shakeouts.;
Other versions of this item:
- Francesca Lotti & Enrico Santarelli, 2004. "Industry Dynamics and the Distribution of Firm Sizes: A Nonparametric Approach," Southern Economic Journal, Southern Economic Association, vol. 70(3), pages 443-466, January.
- F. Lotti & E. Santarelli, 2001. "Industry Dynamics and the Distiribution of Firm Sizes: A Non-Parametric Apporoach," Working Papers 406, Dipartimento Scienze Economiche, Universita' di Bologna.
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.:
- L. A. N. Amaral & S. V. Buldyrev & S. Havlin & H. Leschhorn & P. Maass & M. A. Salinger & H. E. Stanley & M. H. R. Stanley, 1997. "Scaling behavior in economics: I. Empirical results for company growth," Papers cond-mat/9702082, arXiv.org.
- Ariel Pakes & Richard Ericson, 1989.
"Empirical Implications of Alternative Models of Firm Dynamics,"
NBER Working Papers
2893, National Bureau of Economic Research, Inc.
- Pakes, A. & Ericson, R., 1990. "Empirical Implications Of Alternative Models Of Firm Dynamics," Papers 594, Yale - Economic Growth Center.
- Klepper, Steven & Miller, John H., 1995. "Entry, exit, and shakeouts in the United States in new manufactured products," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 567-591, December.
- Jose A. F. Machado & Jose Mata, 2000. "Box-Cox quantile regression and the distribution of firm sizes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(3), pages 253-274.
- Francesca Lotti & Enrico Santarelli & Marco Vivarelli, 2001. "The relationship between size and growth: the case of Italian newborn firms," Applied Economics Letters, Taylor and Francis Journals, vol. 8(7), pages 451-454.
- David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, June.
- Cabral, Luís M B & Mata, José, 2001.
"On the Evolution of the Firm Size Distribution: Facts and Theory,"
CEPR Discussion Papers
3045, C.E.P.R. Discussion Papers.
- Lu�s M B Cabral & Jos� Mata, 2003. "On the Evolution of the Firm Size Distribution: Facts and Theory," American Economic Review, American Economic Association, vol. 93(4), pages 1075-1090, September.
- Brock, W A, 1999. "Scaling in Economics: A Reader's Guide," Industrial and Corporate Change, Oxford University Press, vol. 8(3), pages 409-46, September.
- Boeri, Tito & Bellmann, Lutz, 1995. "Post-entry behaviour and the cycle: Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 483-500, December.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
- Ijiri, Yuji & Simon, Herbert A, 1974. "Interpretations of Departures from the Pareto Curve Firm-Size Distributions," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 315-31, Part I, M.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Cabral, Luís M B, 1997. "Entry Mistakes," CEPR Discussion Papers 1729, C.E.P.R. Discussion Papers.
- Ericson, Richard & Pakes, Ariel, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 53-82, January.
- Peter 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.
- Stephen Hymer & Peter Pashigian, 1962. "Firm Size and Rate of Growth," Journal of Political Economy, University of Chicago Press, vol. 70, pages 556.
- Geroski, Paul A, 1999. "The Growth of Firms in Theory and in Practice," CEPR Discussion Papers 2092, C.E.P.R. Discussion Papers.
- F. Lotti & E. Santarelli & M. Vivarelli, 1999. "Does Gibrat’s Law Hold in the Case of Young, Small Firms?," Working Papers 361, Dipartimento Scienze Economiche, Universita' di Bologna.
- Pakes, Ariel & Ericson, Richard, 1998. "Empirical Implications of Alternative Models of Firm Dynamics," Journal of Economic Theory, Elsevier, vol. 79(1), pages 1-45, March.
- Audretsch, David B. & Santarelli, Enrico & Vivarelli, Marco, 1999. "Start-up size and industrial dynamics: some evidence from Italian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 965-983, October.
- Francesca Lotti & Enrico Santarelli & Marco Vivarelli, 2001. "Is It Really Wise to Design Policies in Support of New Firm Formation?," Rivista di Politica Economica, SIPI Spa, vol. 91(4), pages 151-170, April-May.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral 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: ().
If references are entirely missing, you can add them using this form.