Corporate growth and industrial dynamics: evidence from French manufacturing

• Published in: Applied economics Vol. 43; no. 1; pp. 103 - 116
• Main Authors: Bottazzi, Giulio, Coad, Alex, Jacoby, Nadia, Secchi, Angelo
• Format: Journal Article
• Language: English
• Published: London Routledge 01.01.2011; Taylor and Francis Journals; Taylor & Francis Ltd; Taylor & Francis (Routledge)
• Series: Applied Economics
• Subjects: Corporate growth; Economic dynamics; Economic models; France; Growth rate; Growth rates; Industrial economics; Industrial production; Industrial sector; Industrial structure; Manufacturers; Regression analysis; Size of enterprise; Studies; France; Social Sciences & Humanities
• ISSN: 0003-6846; 1466-4283
• DOI: 10.1080/00036840802400454

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.