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Corporate growth and industrial dynamics: evidence from French manufacturing

  • Giulio Bottazzi
  • Alex Coad
  • Nadia Jacoby
  • Angelo Secchi

This work explores basic properties of the size and growth rates distributions of firms at the aggregate and disaggregate levels. Using an extensive dataset on French manufacturing firms, we investigate which properties of firm size distributions and growth dynamics characterize the aggregate dynamics and are, at the same time, robust under disaggregation. Our analysis is based on nonlinear robust regression methods which have never been applied before to this kind of data. The growth rates distributions we observe are well described by a Subbotin distribution with a shape parameter significantly lower than 1, suggesting a noticeable departure from the Laplace behaviour reported in previous works on Italian and the US data. At the same time, the variance of growth rates depends negatively on size and the relationship does not seem to be linear, with larger firms possibly displaying lower variability in their growth dynamics. At the disaggregate level, we observe significant heterogeneity in the firm size distributions across sectors, while the shape of the sectoral growth rates density displays a surprising degree of homogeneity.

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

Volume (Year): 43 (2011)
Issue (Month): 1 ()
Pages: 103-116

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Handle: RePEc:taf:applec:v:43:y:2011:i:1:p:103-116
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  1. MacKinnon, James G. & White, Halbert, 1985. "Some heteroskedasticity-consistent covariance matrix estimators with improved finite sample properties," Journal of Econometrics, Elsevier, vol. 29(3), pages 305-325, September.
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  3. Alex Coad, 2007. "Firm growth : a survey," Documents de travail du Centre d'Economie de la Sorbonne r07024, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  4. Giulio Bottazzi & Angelo Secchi, 2003. "Common Properties and Sectoral Specificities in the Dynamics of U.S. Manufacturing Companies," Review of Industrial Organization, Springer, vol. 23(3_4), pages 217-232, December.
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  7. Evans, David S., 1986. "The Relationship Between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Working Papers 86-33, C.V. Starr Center for Applied Economics, New York University.
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  11. Bottazzi, Giulio & Dosi, Giovanni & Lippi, Marco & Pammolli, Fabio & Riccaboni, Massimo, 2001. "Innovation and corporate growth in the evolution of the drug industry," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1161-1187, July.
  12. Giulio Bottazzi & Elena Cefis & Giovanni Dosi & Angelo Secchi, 2003. "Invariances and Diversities in the Evolution of Manufacturing Industries," LEM Papers Series 2003/21, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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  15. Francesca Lotti & Enrico Santarelli & Marco Vivarelli, 2001. "The relationship between size and growth: the case of Italian newborn firms," Applied Economics Letters, Taylor & Francis Journals, vol. 8(7), pages 451-454.
  16. 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.
  17. Giulio Bottazzi & Angelo Secchi, 2005. "Growth and Diversification Patterns of the Worldwide Pharmaceutical Industry," Review of Industrial Organization, Springer, vol. 26(2), pages 195-216, December.
  18. Prais, Sigmund J, 1974. "A New Look at the Growth of Industrial Concentration," Oxford Economic Papers, Oxford University Press, vol. 26(2), pages 273-88, July.
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