The Macroeconomic Environment and the Size Pattern of Business Firms

Fabrizio Trau

Working Papers from Centre for Business Research, University of Cambridge

Abstract: Empirical evidence shows that the second half of the 20th century has been characterised by a dramatic change in the evolutionary pattern of firms' size structure: the general tendency towards a growing importance of big business which marked the first phase of post-war development came to a halt in the early '70s, making way to a gradual decrease of the average size of firms and an employment shift towards smaller sized units. This paper argues that such a phenomenon is closely related to the major changes which have affected the macroeconomic environment over the same period, bringing to an end the so-called Golden Age. Particular emphasis is given to the role played, in this connection, by both the increase in the strength of global competition and structurally higher market uncertainty.

Keywords: Golden Age and big business; uncertainty, competition and firm downsizing; vertical integration, business de-conglomeration. (search for similar items in EconPapers)
JEL-codes: D21 D23 L11 L2 (search for similar items in EconPapers)
Date: 2001-03
New Economics Papers: this item is included in nep-pke
Note: PRO-1
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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp192

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