The Firm Size Distribution and Inter-Industry Diversification

Jozef Konings, Patrick Paul Walsh

Research output: Contribution to journalArticle

4 Citations (Scopus)

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. This paper investigates whether the time to build a portfolio of products from inter-industry diversification is a mechanism that helps explain the stylized facts of the FSD by age cohorts. We find that the degree of inter-industry diversification has a separate impact on firm size when controlling for age, amongst other factors. Using the techniques of Cabral and Mata, we find that inter-industry diversification does shift the FSD to the right, and more so in older age groups.

Original languageEnglish
Pages (from-to)65-82
Number of pages18
JournalReview of Industrial Organization
Volume37
Issue number2
DOIs
Publication statusPublished - Oct 7 2010

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Keywords

  • Firm age
  • Firm size distribution
  • Inter-industry diversification

ASJC Scopus subject areas

  • Economics and Econometrics
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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