Firm Growth and Persistence of Chance: Evidence from Portuguese Microdata

Blandina Oliveira () and Adelino Fortunato

No 2005-10, GEMF Working Papers from GEMF - Faculdade de Economia, Universidade de Coimbra

Abstract: Considering a dynamic firm growth model with serial correlation this work studies the effects of R&D activities and investment, both physical and R&D, on the growth of firms. The main hypotheses maintain that firms with a strong commitment to R&D have higher rate of growth and investment has a positive effect on firm growth. We investigate such relations with reference to an unbalanced panel data set of Portuguese manufacturing firms over the period 1990 to 2001. We find that a systematic tendency for smaller firms to grow more quickly is the main reason why firm growth is not entirely stochastic.

Keywords: Firm growth; R&D; GMM system estimator (search for similar items in EconPapers)
JEL-codes: L11 L13 C23 (search for similar items in EconPapers)
Date: 2005
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Persistent link: http://EconPapers.repec.org/RePEc:gmf:wpaper:2005-10

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