Times are a changin'? The emergence of new firms and rank persistence
No 01/18, Working Papers from Institut für Mittelstandsforschung (IfM) Bonn
Young firms are known to grow at a faster rate than incumbents. With administrative firm data from Germany, we show that the higher growth rates indeed translate into upward mobility within the firm size distribution. Young firms are therefore not only able to catch up, but also to grow larger in absolute values. Recentered influence function regression results reveal that young firms cause significant rank mobility within the stock of firms, which even holds when the local skewness of the firm size distribution is accounted for. The results clearly indicate a Schumpeterian growth process where young firms challenge established ones.
Keywords: competition; entrepreneurship; firm entry; firm growth; sales mobility (search for similar items in EconPapers)
JEL-codes: L10 L25 L26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ent, nep-eur and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifmwps:0118
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