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Cross-sectoral effects of retailing firm demographies

Marcus Dejardin ()

ERSA conference papers from European Regional Science Association

Abstract: With regard to the interrelationship between firm births and deaths, Johnson & Parker (1994, 1996) have summarized the various causality relationships into three different effects: what they call the Multiplier, the Competition and the Marshall effects. In a recent paper, Dejardin (2001) has built on these earlier contributions and has suggested an enlarged analytical framework by introducing and discussing (inter)sectoral and spatial dimensions. Multiplier and Competition effects were reassessed according to the degree of sectoral disaggregation and to Hicks & Allen (1934) complementarity between economic activities. We suggested that the Competition (Multiplier) effect should overcome more probably the Multiplier (Competition) effect since analyses and empirical studies are focused on very disaggregated (aggregated) sectoral demographic events. Preliminary spatial econometric results obtained for Belgian retailing industries confirmed the relevance of an (inter)sectoral and spatial setting for research in the interrelationship between firm births and deaths. Estimates relate to 16 retailing industries and their aggregate. However, this previous research encounters various limitations. So, from a theoretical point of view, it appears that arguments already exposed could be more explicit, as we referred to general analytical framework such as Hicks & Allen notion of complementary goods or spatial oligopolistic models that were only very briefly discussed. From an empirical point of view, data were exploited through the estimations of an econometric model which specification may reveal heavy without meaning important gains in terms of econometric accuracy or explanatory efficiency. The aims of this new paper are mainly to respond to these limitations and to give a more emphatic treatment of cross-sectoral effects. Concerning this last and more specific purpose, we test different sectoral matchings (or aggregations) and interpret the new econometric results that are obtained through this more flexible and a priori less defined statistical treatment. References DEJARDIN, M. (2001), "Firm demography in a sectoral and spatial setting", paper presented at the Third Congress on Proximity 'New Growth and Territories', Paris, December 13-14. JOHNSON, P. & S. PARKER (1994), "The interrelationships between births and deaths", Small Business Economics, 6, 283-290. JOHNSON, P. & S. PARKER (1996), "Spatial variations in the determinants and effects of firm births and deaths", Regional Studies, 30, 7, 679-688. HICKS, J. & R. ALLEN (1934, "A reconsideration of the theory of value, parts I and II", Economica, N.S., February, pp. 52-76 and May, pp. 196-219.

Date: 2002-08
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