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Is there a life cycle in all industries? First evidence from industry size dynamics in West Germany

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  • Thomas Brenner
  • Matthias Dorner

Abstract

We propose a novel nonlinear regression approach to test whether the size of industries develops over time along the stylized pattern assumed by the industry life cycle theory. We apply our model on data covering the full spectrum of 205 NACE industries including services in West Germany between 1976 and 2009 and four indicators describing industry size (employment, establishments, entries and exits). The results of our large scale analysis show that in most industries indeed size develops along a cyclical path, albeit this development is not universal. Furthermore, we provide first empirical evidence on service industries where we show that the number of establishments and employees frequently develop in line with what is found for most (product) industries.

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  • Thomas Brenner & Matthias Dorner, 2017. "Is there a life cycle in all industries? First evidence from industry size dynamics in West Germany," Applied Economics Letters, Taylor & Francis Journals, vol. 24(5), pages 289-297, March.
    • Handle: RePEc:taf:apeclt:v:24:y:2017:i:5:p:289-297
    DOI: 10.1080/13504851.2016.1184369
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    Cited by:

    1. Thomas Brenner & Franziska Pudelko, 2019. "The effects of public research and subsidies on regional structural strength," Journal of Evolutionary Economics, Springer, vol. 29(5), pages 1433-1458, November.

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