Abstract
Abstract
We introduce a new methodology to investigate the degree of persistence in firm growth dynamics, based on Conditional Quantile Transition Probability Matrices (CQTPMs) and exact inferential tests derived from two well-known mobility indexes. We apply the methodology to study manufacturing firms in the UK and four major European economies over the period 2010–2017. We find that CQTPMs display more persistence than under a fully independent firm growth process, albeit considerable turbulence and significant bouncing effects are detected. Exploiting the inferential statistics within a regression framework, we show that productivity, openness to trade, and business dynamism are the primary sources of firm growth persistence across sectors, while country-specific and time-specific factors play a second-order role.
Funder
Scuola Superiore Sant'Anna
Publisher
Springer Science and Business Media LLC
Subject
Economics and Econometrics,General Business, Management and Accounting
Reference59 articles.
1. Amaral, L., Buldyrev, S., Havlin, S., Maass, P., Salinger, M., Stanley, H., & Stanley, M. (1997). Scaling behavior in economics: The problem of quantifying company growth. Physica A, 244, 1–24.
2. Bajgar, M., Berlingieri, G., Calligaris, S., Criscuolo, C., & Timmis, J. (2020). Coverage and representativeness of Orbis data. OECD Science, Technology and Industry Working Papers 2020/06 OECD Publishing.
3. Bartelsman, E. J., & Dhrymes, P. J. (1998). Productivity dynamics: U.s. manufacturing plants, 1972–1986. Journal of Productivity Analysis, 9, 5–34.
4. Bartholomew, D. J. (1982). Stochastic Models for Social Processes. New York: John Wiley & Son.
5. Bianchini, S., Bottazzi, G., & Tamagni, F. (2017). What does (not) characterize persistent corporate high-growth? Small Business Economics, 48, 633–656.