Ownership networks, financing, and firm growth

This presentation extends the literature on firm dynamics by incorporating ownership networks and financing in the study of firm growth. I observe co-ownership connections for the universe of privately owned Ecuadorian manufacturing firms between 2000 and 2019. The structure of my data allows to construct ownership network variables and determine their impact on firm growth in a quantile fixed-effect dynamic regression framework. This approach uncovers the heterogeneous impact of firm age on firm growth across the entire conditional firm-growth distributions and statistically significant leverage and network effects. The relationship between firm growth and leverage remains positive with the inclusion of ownership networks. For young firms, the results indicate that there is no significant relationship between age and growth. This result suggests that financial variables continue to matter and that ownership networks capture alternative aspects of firm dynamics that have not been previously acknowledged.