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Firm growth and productivity growth: evidence from a panel VAR

  • Alex Coad
  • Tom Broekel

This article offers new insights into the processes of firm growth by applying a reduced-form Vector Autoregression (VAR) model to longitudinal panel data on French manufacturing firms. We observe the co-evolution of key variables such as growth of employment, sales and gross operating surplus, as well as growth of multifactor productivity. It seems that employment growth is negatively associated with subsequent growth of productivity. This latter result, however, is sensitive to our choice of productivity indicator, i.e. multifactor productivity or labour productivity.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 44 (2012)
Issue (Month): 10 (April)
Pages: 1251-1269

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Handle: RePEc:taf:applec:44:y:2012:i:10:p:1251-1269
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  1. Adelina Gschwandtner, 2005. "Profit persistence in the 'very' long run: evidence from survivors and exiters," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 793-806.
  2. John Haltiwanger & Martin N Baily & Eric J Bartelsman, 1994. "Downsizing and Productivity Growth: Myth or Reality?," Working Papers 94-4, Center for Economic Studies, U.S. Census Bureau.
  3. Mark Doms & Timothy Dunne, 1994. "Capital Adjustment Patterns in Manufacturing Plants," Working Papers 94-11, Center for Economic Studies, U.S. Census Bureau.
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  6. Alex Coad & Tom Broekel, 2007. "Firm growth and productivity growth : evidence from a panel VAR," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00200086, HAL.
  7. Giulio Bottazzi & Elena Cefis & Giovanni Dosi, 2002. "Corporate growth and industrial structures: some evidence from the Italian manufacturing industry," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 705-723, August.
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  10. Alex Coad, 2008. "Firm growth and scaling of growth rate variance in multiplant firms," Economics Bulletin, AccessEcon, vol. 12(9), pages 1-15.
  11. Disney, Richard F & Haskel, Jonathan & Heden, Ylva, 2000. "Restructuring And Productivity Growth In UK Manufacturing," CEPR Discussion Papers 2463, C.E.P.R. Discussion Papers.
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  13. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth. Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
  14. J. O. S. Wilson & J. M. Williams, 2000. "The size and growth of banks: evidence from four European countries," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1101-1109.
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  17. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521608275, October.
  18. Alex Coad, 2006. "A Closer Look at Serial Growth Rate Correlation," LEM Papers Series 2006/29, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  19. Cazals, Catherine & Florens, Jean-Pierre & Simar, Leopold, 2002. "Nonparametric frontier estimation: a robust approach," Journal of Econometrics, Elsevier, vol. 106(1), pages 1-25, January.
  20. Coad, Alex, 2007. "Testing the principle of `growth of the fitter': The relationship between profits and firm growth," Structural Change and Economic Dynamics, Elsevier, vol. 18(3), pages 370-386, September.
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