Firm Size Distribution and Employment Fluctuations: Theory and Evidence

Holger Görg, Philipp Henze, Viroj Jienwatcharamongkhol, Daniel Kopasker, Hassan Molana, Catia Montagna and Fredrik Sjöholm
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Viroj Jienwatcharamongkhol: University of Nottingham

No 10371, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper studies the effect of the firm-size distribution on the relationship between employment and output. We construct a theoretical model, which predicts that changes in demand for industry output have larger effects on employment in industries characterised by a distribution that is more skewed towards smaller firms. Industry-specific shape parameters of the firm size distributions are estimated using firm-level data from Germany, Sweden and the UK, and used to augment a relationship between industry-level employment and output. Our empirical results align with the predictions of the theory and confirm that the size distribution of firms is an important determinant of the relationship between changes in output and employment.

Keywords: firm distribution; firm size; employment; fluctuations (search for similar items in EconPapers)
JEL-codes: E20 E23 L20 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2016-11
New Economics Papers: this item is included in nep-eur, nep-lab, nep-mac and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Research in Economics, 2017, 71(4), 690-703

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https://docs.iza.org/dp10371.pdf (application/pdf)

Related works:
Journal Article: Firm size distribution and employment fluctuations: Theory and evidence (2017)
Working Paper: Firm Size Distribution and Employment Fluctuations: Theory and Evidence (2016)
Working Paper: Firm Size Distribution and Employment Fluctuations: Theory and Evidence (2016)
Working Paper: Firm size distribution and employment fluctuations: Theory and evidence (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp10371

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