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Firm growth, European industry dynamics and domestic business cycles

  • Harald Oberhofer

    ()

Based on the empirical firm growth literature and on heterogeneous (microeconomic) adjustment models, this paper empirically investigates the impact of European industry fluctuations and domestic business cycles on the growth performance of European firms. Since the implementation of the Single market program (SMP) the EU 27 member states share a common market. Accordingly, the European industry business cycle is expected to become a more influential predictor of European firms' behavior at the expense of domestic fluctuations. Empirically, the results of a two-part model for a sample of European manufacturing firms reject this hypothesis. Additionally, subsidiaries of Multinational Enterprises (MNEs) constitute the most stable firm cohort throughout the observed business cycle.

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File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2009-18.pdf
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Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2009-18.

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Length: 29
Date of creation: Jul 2009
Date of revision:
Handle: RePEc:inn:wpaper:2009-18
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