The firm size distribution and inter-industry diversification

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Title: The firm size distribution and inter-industry diversification
Authors: Hutchinson, John
Konings, Jozef
Walsh, Patrick P.
Permanent link: http://hdl.handle.net/10197/2680
Date: Aug-2009
Abstract: We show that the stylized facts of the Firm Size Distribution (FSD) by age cohorts, as shown in Cabral and Mata (2003), bind within 4-digit manufacturing industries in the UK and Belgium. As in Klepper and Thompson (2006) and Sutton (1998), we explore whether time to build a portfolio of products is a mechanism that relates age to firm size. While inter industry diversification, to some extent, accounts for the role of age, we find that the presence of economies of scope has a separate impact on firm size when controlling for age, amongst other factors. Using the techniques in Cabral and Mata’s we show that the FSD by degrees of product diversification shifts to the right, but more so in older age groups. This shows a role for inter-industry diversification over and above an age effect.
Funding Details: Not applicable
Type of material: Working Paper
Publisher: University College Dublin. Geary Institute
Series/Report no.: UCD Geary Institute Discussion Paper Series; WP 09 26
Subject LCSH: Industrial organization
Business enterprises--Size
Diversification in industry
Other versions: http://ideas.repec.org/p/ucd/wpaper/200926.html
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geary Institute Working Papers

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