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The Industry Life-Cycle of the Size Distribution of Firms

Author

Listed:
  • Glenn MacDonald
  • Emin Dinlersoz
Abstract
This paper analyzes the evolution of the distributions of output and employment across firms in U.S. manufacturing industries from 1963 until 1997. The evolutions of the employment and output distributions differ, but display strong inter-industry regularities, including that the nature of the evolution depends whether the industry is experiencing growth, shakeout, maturity, or decline. The observed patterns have implications for theories of industry dynamics and evolution.

Suggested Citation

  • Glenn MacDonald & Emin Dinlersoz, 2005. "The Industry Life-Cycle of the Size Distribution of Firms," Working Papers 05-10, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:05-10
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    References listed on IDEAS

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    5. Finbarr Livesey, 2012. "Rationales for Industrial Policy Based on Industry Maturity," Journal of Industry, Competition and Trade, Springer, vol. 12(3), pages 349-363, September.
    6. Natália Barbosa & Ana Paula Faria & Vasco Eiriz, 2014. "Industry- and firm-specific factors of innovation novelty," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(3), pages 865-902.
    7. Heinrich, Torsten & Dai, Shuanping, 2016. "Diversity of firm sizes, complexity, and industry structure in the Chinese economy," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 90-106.
    8. Young Gwan Lee & Kihyun Park & Hyun Jae Kim & Seong-Hoon Cho, 2023. "Creating portfolios of firm-specific energy R&D investment under market uncertainty," Energy & Environment, , vol. 34(5), pages 1548-1563, August.
    9. Bos, J.W.B. & Stam, E., 2011. "Gazelles, industry growth and structural change," Research Memorandum 018, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    10. Barbosa, Natália & Faria, Ana Paula, 2011. "Innovation across Europe: How important are institutional differences?," Research Policy, Elsevier, vol. 40(9), pages 1157-1169.
    11. Qi Li & Patrick Paul Walsh, 2009. "The Firm Size Distribution in a Small Open Economy: Theory and Evidence," Working Papers 200920, Geary Institute, University College Dublin.
    12. Paolo Calvosa, 2021. "Entry, Exit and Innovation over the Industry Life Cycle in Converging Sectors: An Analysis of the Smartphone Industry," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(12), pages 151-151, July.
    13. Christian Cordes & Tong-Yaa Su & Pontus Strimling, 2015. "Going Through a Crisis: Firm Devekopment and Firm SIze Distributions," Papers on Economics and Evolution 2015-06, Philipps University Marburg, Department of Geography.
    14. Emin Dinlersoz & Can Dogan & Nikolas Zolas, 2024. "Starting Up AI," Working Papers 24-09, Center for Economic Studies, U.S. Census Bureau.
    15. Thorbjørn Knudsen & Daniel A. Levinthal & Sidney G. Winter, 2017. "Systematic Differences and Random Rates: Reconciling Gibrat’s Law with Firm Differences," Strategy Science, INFORMS, vol. 2(2), pages 111-120, June.
    16. Moutinho, Ricardo & Au-Yong-Oliveira, Manuel & Coelho, Arnaldo & Manso, José Pires, 2015. "Beyond the “Innovation's Black-Box”: Translating R&D outlays into employment and economic growth," Socio-Economic Planning Sciences, Elsevier, vol. 50(C), pages 45-58.
    17. Forbes, Daniel P. & Kirsch, David A., 2011. "The study of emerging industries: Recognizing and responding to some central problems," Journal of Business Venturing, Elsevier, vol. 26(5), pages 589-602, September.
    18. MORITA, Hodaka & TANG, Cheng-Tao, 2017. "Asset Specificity, Human Capital Acquisition, and Labor Market Competition," Discussion paper series HIAS-E-42, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    19. Seong-Hoon Cho & Jaimin Lee, 2021. "Estimating the uncertainty–R&D investment relationship and its interactions with firm size," Small Business Economics, Springer, vol. 57(3), pages 1243-1267, October.
    20. Jaap W. B. Bos & Erik Stam, 2014. "Gazelles and industry growth: a study of young high-growth firms in The Netherlands," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(1), pages 145-169, February.
    21. Jinji, Naoto & Zhang, Xingyuan & Haruna, Shoji, 2019. "Does a firm with higher Tobin’s q prefer foreign direct investment to foreign outsourcing?," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    22. Christian Cordes & Tong-Yaa Su & Pontus Strimling, 2019. "A critical human group size and firm size distributions in industries," Journal of Bioeconomics, Springer, vol. 21(2), pages 123-144, July.
    23. Alireza Javanmardi Kashan & Kavoos Mohannak, 2017. "The Role of Knowledge Integration in Capability Development and Emergence of Innovation Ecosystem," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 14(05), pages 1-18, October.
    24. Thomas Brenner & Matthias Dorner, 2017. "Is there a life cycle in all industries? First evidence from industry size dynamics in West Germany," Applied Economics Letters, Taylor & Francis Journals, vol. 24(5), pages 289-297, March.

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    More about this item

    Keywords

    Firm size distribution; industry evolution; industry dynamics; manufacturing industries;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

    NEP fields

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