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The Anatomy of the Firm Size Distribution: The Evolution of its Variance and Skewness

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Author Info
Peter Huber (WIFO)
Michael Pfaffermayr (WIFO)

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Abstract

The evolution of higher moments of the firm size distribution so far seems to be neglected in the empirical firm growth literature. Based on GMM estimates, this paper introduces simple Wald tests to investigate whether the firm size distribution converges in both the second and third central moment. Using a comprehensive sample of Austrian firms, the estimation results indicate a substantial reduction in both the second and third central moment for the younger age cohorts. This effect is much less pronounced for older firms. Across age cohorts one observes an increase in variance, while the third central moment tends to vanish.

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Publisher Info
Paper provided by WIFO in its series WIFO Working Papers with number 295.

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Length: 29 pages
Date of creation: 20 Jun 2007
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Handle: RePEc:wfo:wpaper:y:2007:i:295

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Keywords: Growth of firms; market concentration; moments of the firm size distribution; GMM estimation; Wald test;

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  2. Francesca Lotti & Enrico Santarelli, 2001. "Industry Dynamics and the Distribution of Firm Sizes: A Non-Parametric Approach," LEM Papers Series 2001/14, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
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  3. P. Hart, 2000. "Theories of Firms' Growth and the Generation of Jobs," Review of Industrial Organization, Springer, vol. 17(3), pages 229-248, November. [Downloadable!] (restricted)
  4. Serguei Kaniovski & Michael Peneder, 2008. "Determinants of firm survival: a duration analysis using the generalized gamma distribution," Empirica, Springer, vol. 35(1), pages 41-58, March. [Downloadable!] (restricted)
  5. Andrea Ichino & Guido Schwerdt & Rudolf Winter-Ebmer & Josef Zweimüller, 2007. "Too Old to Work, too Young to Retire?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  6. Luís M B Cabral & José 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. [Downloadable!]
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  7. Stiglbauer, Alfred M. & Stahl, Florian & Winter-Ebmer, Rudolf & Zweimüller, Josef, 2002. "Job Creation and Job Destruction in a Regulated Labor Market: The Case of Austria," IZA Discussion Papers 546, Institute for the Study of Labor (IZA). [Downloadable!]
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  21. Bottazzi, Giulio & Secchi, Angelo, 2003. "Why are distributions of firm growth rates tent-shaped?," Economics Letters, Elsevier, vol. 80(3), pages 415-420, September. [Downloadable!] (restricted)
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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. Alex Coad & Werner Hölzl, 2009. "On the Autocorrelation of Growth Rates," Journal of Industry, Competition and Trade, Springer, vol. 9(2), pages 139-166, June. [Downloadable!] (restricted)
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