Invariances and Diversities in the Patterns of Industrial Evolution: Some Evidence from Italian Manufacturing Industries

Abstract

This work explores and compares some basic properties of corporate growth process at both aggregate manufacturing level and disaggregated sectoral levels. Using an extensive dataset on Italian manufacturing firms, we investigate which properties of firm growth dynamics are robust under disaggregation. We compare the results obtained with three different definitions of firm size, namely total sales, number of employees and value added. Our analysis suggests that while different sectors are characterized by significant differences in firm size distributions, in the degrees of concentration and in the autoregressive structure of the growth processes, there are also regularities which hold across all of them, such as the approximate unit root nature of the growth process and the power exponential shape of the growth rates density. Together, these “stylized facts” suggest challenging puzzles on the drivers of corporate growth and the resulting industrial structures. Copyright Springer 2007aggregation, concentration, firm growth, size distribution, C1, D2, L1,

Growth processes of Italian manufacturing firms

“…The issue of the dependence of growth on size is an old one within the traditional Gibrat's law framework. On this point, previous analysis based on a similar sample of Italian manufacturing (see Bottazzi et al (2007)) has not found any dependence between sales levels and sales growth. In addition, recent studies show that the time scale of growth processes can vary between small and large firms: whilst small firms display significant negative autocorrelation in annual growth rates (measured in terms of sales and employment), larger firms experience positive autocorrelation, which is consistent with the idea that they plan their growth projects over a longer time horizon (Coad, 2007a).…”

“…11 Table 1 shows year-wise summary statistics, which provide the reader with an idea of 6 The database has been made available under the mandatory condition of censorship of any individual information. (Bottazzi et al, 2007), showing that the growth rate distributions of Italian firms are well approximated by a Laplace (or symmetric exponential) distribution. Finally, we also notice that the distribution of growth rates of GOS has a particularly wide support, which would indicate considerable heterogeneity between firms in terms of the dynamics of their profits.…”

“…The normalization, besides keeping comparability with previous work (e.g. Bottazzi et al (2007), Bottazzi et al (2009)), also removes average time trends common to all the firms caused by factors such as inflation and business cycle effects. 8…”

SMEs' Growth Heterogeneity - Evidence from Regional Developments

“…Chesher, 1979;Bottazzi et al, 2001) while others report a negative serial correlation (e.g. Boeri and Cramer, 1992;Bottazzi et al, 2007). Even further studies have failed to find any autocorrelation in the data (e.g.…”

Dynamics of Productivity and Cost of Labor in Italian Manufacturing Firms

“…Whether there exists a large literature on size and productivity differences among firms (a comprehensive survey is that in Bartelsman and Doms, 2000, for Italy refer to Bottazzi et al, 2007Bottazzi et al, , 2005 there is much less evidence documenting differences in the cost of labor of firms. In this respect, we begin by showing the degree of heterogeneity in the cost of labor for firms belonging to the same three-digit sector.…”