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Studying Firm Growth Distributions with a Large Administrative Employment Database

Dixon Jay (), Robert Petrunia () and Anne-Marie Rollin ()
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Dixon Jay: Statistics Canada, 100 Tunney’s Pasture Driveway, Ottawa, Ontario, Canada K1A 0T6

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2018, vol. 238, issue 3-4, 189-221

Abstract: This paper uses business tax administrative data to describe the annual firm growth rate distribution in Canada over the 2000–2009 period. This administrative tax database provides a unique lense to study firm growth as it allows us to look at the universe of Canadian employer firms and investigate the firm growth distribution across different dimensions. A non-normal, fat-tailed shape for the firm growth distributions holds across years, industries, regions, as well as firm size and age classes. The results show that the distributions of employment growth rates in Canada have more density in both the center and tails than a normal distribution. The evidence paints a picture of firm growth dynamics whereby most firms change very little each year, while a nontrivial amount also markedly grow or decline. A final finding is that young firms, aged four or less, represent a special case with an upwardly skewed distribution and a median growth rate greater than zero.

Keywords: administrative data; firm growth (search for similar items in EconPapers)
JEL-codes: L11 (search for similar items in EconPapers)
Date: 2018
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