The Firm Size Distribution and Inter-Industry Diversification

John Hutchinson, Jozef Konings and Patrick Walsh ()
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John Hutchinson: European Central Bank

No 200926, Working Papers from Geary Institute, University College Dublin

Abstract: We show that the stylized facts of the Firm Size Distribution (FSD) by age cohorts, as shown in Cabral and Mata (2003), bind within 4-digit manufacturing industries in the UK and Belgium. As in Klepper and Thompson (2006) and Sutton (1998), we explore whether time to build a portfolio of products is a mechanism that relates age to firm size. While inter industry diversification, to some extent, accounts for the role of age, we find that the presence of economies of scope has a separate impact on firm size when controlling for age, amongst other factors. Using the techniques in Cabral and Mata's we show that the FSD by degrees of product diversification shifts to the right, but more so in older age groups. This shows a role for inter-industry diversification over and above an age effect.

JEL-codes: L10 L11 L16 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-08-25
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse, nep-ent, nep-ind and nep-tid
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http://www.ucd.ie/geary/static/publications/workingpapers/gearywp200926.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: The Firm Size Distribution and Inter-Industry Diversification (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ucd:wpaper:200926

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