Growth Processes of Italian Manufacturing Firms

Alex Coad (), Rekha Rao () and Federico Tamagni ()

No 2008-039, Jena Economic Research Papers in Economics from Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek

Abstract: We apply a reduced-form vector autoregression model to analyze the growth processes of Italian manufacturing firms, 1989-1997. We focus in particular on lead-lag associations describing the coevolution of employment growth, sales growth, growth of profits and labour productivity growth. Employment growth precedes sales growth and growth of profits, and in turn sales growth is also associated with subsequent profits growth. There appears to be little feedback of either sales or profits on employment growth, however. There is no clear association of employment growth with subsequent changes in labour productivity, although at the second lag there is a small negative association. Productivity growth, however, is positively associated with subsequent growth of employment and sales. Quantile autoregressions find asymmetries between growth processes for growing and shrinking firms.

Keywords: Firm Growth; Panel VAR; Employment Growth; Industrial Dynamics; Productivity Growth (search for similar items in EconPapers)
JEL-codes: L25 L20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff and nep-ent
Date: 2008-05-06
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Working Paper: Growth Processes of Italian Manufacturing Firms (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:jrp:jrpwrp:2008-039

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