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A nonparametric analysis of firm size, leverage and labour productivity distribution dynamics

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Listed:
  • Kim Huynh

    ()

  • David Jacho-Chávez

    ()

  • Robert Petrunia

    ()

  • Marcel Voia

    ()

Abstract

This paper investigates the evolution of firm distributions for entrant manufacturing firms in Canada using nonparametric methods. These nonparametric methods use functional principal components to describe these densities over time. This method is applied to a novel administrative firm-level database from Statistics Canada to investigate the evolution of the 1985 and 1989 cohorts of new entrants. We find that firm leverage (debt-to-asset ratio) distributions have persistent deviations from the initial distributions. Bootstrap test statistics suggest that the distributions are different across all time periods. Firm size and labour productivity have transitory deviations and some of the distributions are the same across all time periods. Univariate finite mixture and stochastic dominance tests are used to conduct pairwise comparisons as robustness measures. We find that these static pairwise comparisons confirm the dynamic evolution of these densities. This method illustrates the efficacy of functional principal components to analyse firm distributions. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Kim Huynh & David Jacho-Chávez & Robert Petrunia & Marcel Voia, 2015. "A nonparametric analysis of firm size, leverage and labour productivity distribution dynamics," Empirical Economics, Springer, vol. 48(1), pages 337-360, February.
  • Handle: RePEc:spr:empeco:v:48:y:2015:i:1:p:337-360
    DOI: 10.1007/s00181-014-0807-9
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Canavire Bacarreza, Gustavo J & Carvajal-Osorio, Luis C., 2018. "Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes," IZA Discussion Papers 11584, Institute for the Study of Labor (IZA).
    2. Huynh, Kim P. & Jacho-Chávez, David T. & Kryvtsov, Oleksiy & Shepotylo, Oleksandr & Vakhitov, Volodymyr, 2016. "The evolution of firm-level distributions for Ukrainian manufacturing firms," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 148-162.

    More about this item

    Keywords

    Firm distributions; Functional principal components ; Nonparametric methods; L11; L25; C14;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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