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The Growth of Industrial Sectors: Theoretical Insights and Empirical Evidence from U.S. Manufacturing

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  • Sandro Sapio
  • Grid Thoma

Abstract

In this paper, we study the growth rates of 4-digit sectors in U.S. manufacturing. Two measures of size (value of shipments, value added) are considered, for each of the 38 years (1959-1996) of a sample of 458 4-digit sectors, drawn from the NBER Manufacturing Productivity database. Whole sample results are partly in line with firm growth facts: (i) sectoral growth rates are distributed according to heavy-tailed Subbotin distributions, with shape coefficient between 1.0 (Laplace) and 1.5; (ii) the volatility of growth rates is decreasing with respect to size, with a scaling exponent varying over time, but always between -0.20 and -0.10. Preliminary analyses on more homogeneous groups cast doubts on the evidence of scaling, but leave basically unaffected the distributional properties of sectoral growth. These results shed light on the role of inter-firm correlations, market concentration, and positive intersectoral feedbacks as drivers of meso-economic dynamics.

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Bibliographic Info

Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2006/09.

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Date of creation: 03 Apr 2006
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Handle: RePEc:ssa:lemwps:2006/09

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Keywords: Sectoral Growth; Subbotin Distribution; Scaling; U.S. Manufacturing;

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References

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Citations

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Cited by:
  1. Carolina Castaldi & Sandro Sapio, 2008. "Growing like mushrooms? Sectoral evidence from four large European economies," Journal of Evolutionary Economics, Springer, vol. 18(3), pages 509-527, August.
  2. Matthias Duschl & Thomas Brenner, 2011. "Characteristics of Regional Industry-specific Employment Growth – Empirical Evidence for Germany," Working Papers on Innovation and Space 2011-07, Philipps University Marburg, Department of Geography.
  3. Sandro Sapio & Andrea Roventini & Mauro Napoletano, 2006. "Modelling smooth and uneven cross-sectoral growth patterns: an identification problem," Economics Bulletin, AccessEcon, vol. 15(7), pages 1-8.
  4. Mauro Napoletano & Jackie Krafft & Andrea Roventini, 2006. "Are output growth-rate distributions fat-tailed? Some evidence from OECD countries," Sciences Po publications 36, Sciences Po.
  5. Slutskin, Lev, 2009. "Statistical Analysis of Inflationary Processes in Manufacturing Sectors of American Economy, 1959-1996," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 13(1), pages 89-104.
  6. repec:ebl:ecbull:v:15:y:2006:i:7:p:1-8 is not listed on IDEAS
  7. Kenneth Carlaw & Richard Lipsey, 2011. "Sustained endogenous growth driven by structured and evolving general purpose technologies," Journal of Evolutionary Economics, Springer, vol. 21(4), pages 563-593, October.

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