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Growth volatility and size: A firm-level study

Author

Listed:
  • Flavio Calvino

    (OCDE - Organisation de Coopération et de Développement Economiques)

  • Chiara Criscuolo

    (LSE - London School of Economics and Political Science, OCDE - Organisation de Coopération et de Développement Economiques)

  • Carlo Menon

    (OCDE - Organisation de Coopération et de Développement Economiques, LSE - London School of Economics and Political Science)

  • Angelo Secchi

    () (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper provides a systematic cross-country investigation of the relation between a firm's growth volatility and its size. For the first time the analysis is carried out using comparable and representative sets of data sourced by official business registers of an important number of countries. We show that there exists a robust negative relation between growth volatility and size with an average elasticity equal to . We check the robustness of this result against a number of potential sources of bias and in particular with respect to sectoral disaggregation and against the inclusion of firm age. Our result is consistent with the idea that independently from specific country characteristics there exists a common underlying mechanism driving the elasticity between size and growth volatility. We then propose two mechanisms able to explain our result and we conclude discussing its relevance with respect to the recent literature on granularity.

Suggested Citation

  • Flavio Calvino & Chiara Criscuolo & Carlo Menon & Angelo Secchi, 2018. "Growth volatility and size: A firm-level study," Post-Print halshs-01802871, HAL.
  • Handle: RePEc:hal:journl:halshs-01802871
    DOI: 10.1016/j.jedc.2018.04.001
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01802871
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    References listed on IDEAS

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    1. repec:eee:dyncon:v:103:y:2019:i:c:p:63-82 is not listed on IDEAS
    2. Yang, Jangho & Heinrich, Torsten & Winkler, Julian & Lafond, François & Koutroumpis, Pantelis & Farmer, J. Doyne, 2019. "Measuring productivity dispersion: a parametric approach using the Lévy alpha-stable distribution," MPRA Paper 96474, University Library of Munich, Germany.

    More about this item

    Keywords

    Firm size ; Gibrat’s law; Volatility of growth;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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