Is there a life cycle in all industries? First evidence from industry size dynamics in West Germany

Thomas Brenner () and Matthias Dorner

Applied Economics Letters, 2017, vol. 24, issue 5, 289-297

Abstract: We propose a novel nonlinear regression approach to test whether the size of industries develops over time along the stylized pattern assumed by the industry life cycle theory. We apply our model on data covering the full spectrum of 205 NACE industries including services in West Germany between 1976 and 2009 and four indicators describing industry size (employment, establishments, entries and exits). The results of our large scale analysis show that in most industries indeed size develops along a cyclical path, albeit this development is not universal. Furthermore, we provide first empirical evidence on service industries where we show that the number of establishments and employees frequently develop in line with what is found for most (product) industries.

Date: 2017
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DOI: 10.1080/13504851.2016.1184369

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