Firm Size and Short-Term Dynamics in Aggregate Entry and Exit

Identificador:  PC:2044

Handle: https://hdl.handle.net/20.500.11797/PC2044

Autors:  Manjón Antolín, Miguel C.

Resum:
Much of the research on industry dynamics focuses on the interdependence between the sectorial rates of entry and exit. This paper argues that the size of firms and the reaction-adjustment period are important conditions missed in this literature. I illustrate the effects of this omission using data from the Spanish manufacturing industries between 1994 and 2001. Estimates from systems of equations models provide evidence of a conical revolving door phenomenon and of partial adjustments in the replacement-displacement of large firms. KEYWORDS: aggregation, industry dynamics, panel data, symmetry, simultaneity. JEL CLASSIFICATION: C33, C52, L60, L11