English, Article, Journal or magazine article edition: Growth Processes of Italian Manufacturing Firms Alex Coad; Rekha Rao; Federico Tamagni

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Bookmark: http://trove.nla.gov.au/version/830
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Growth Processes of Italian Manufacturing Firms
Author
  • Alex Coad
  • Rekha Rao
  • Federico Tamagni
Physical Description
  • preprint
Notes
  • We propose a multidimensional empirical analysis of the growth processes of firms, focusing on the coevolution of employment growth, sales growth, growth of profits and labour productivity growth. Based on firm level data about Italian manufacturing firms, 1989-1997, we apply a reduced-form vector autoregression model to analyze the lead-lag associations between the different dimension of firm growth. Findings suggest that employment growth precedes sales growth and growth of profits, and that sales growth is also associated with subsequent profits growth. There appears to be little feedback of either sales or profits on employment growth, however, and there is no clear association of employment, sales or profits growth with subsequent changes in labour productivity. Productivity growth, in turn, is more strongly associated with subsequent growth of profits than it does with subsequent growth of either employment or sales. Growth of profits, therefore, tends to represent the absorbing dimension of the overall processes of firm growth. Quantile regressions reveal asymmetries between growth processes for growing and shrinking firms.
  • Household Consumption Expenditure, Budget Shares, Sum of Log-Normal Distributions
  • RePEc:ssa:lemwps:2008/​20
  • We apply a reduced-form vector autoregression model to analyze the growth processes of Italian manufacturing firms, 1989-1997. We focus in particular on lead-lag associations describing the coevolution of employment growth, sales growth, growth of profits and labour productivity growth. Employment growth precedes sales growth and growth of profits, and in turn sales growth is also associated with subsequent profits growth. There appears to be little feedback of either sales or profits on employment growth, however. There is no clear association of employment growth with subsequent changes in labour productivity, although at the second lag there is a small negative association. Productivity growth, however, is positively associated with subsequent growth of employment and sales. Quantile autoregressions find asymmetries between growth processes for growing and shrinking firms.
  • Firm Growth, Panel VAR, Employment Growth, Industrial Dynamics, Productivity Growth
  • RePEc:jrp:jrpwrp:2008-039
Language
  • English
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