Regional variation of firm size and growth

Mulher e Natureza Morta, Júlio Maria dos Reis Pereira, 1927


Regional variation of firm size and growth – The Portuguese case
Natália Barbosa
Vasco Eiriz
Growth and Change 42(2): 125-158

This paper analyses the patterns of firm growth of manufacturing firms across Portuguese regions. In particular, we compare firm size and growth in order to investigate 1) whether region-specific characteristics, interpreted as generating localization economies, exert any influence on firm growth and size, and 2) whether there is evidence of persistence in firm growth across regions. Using an extensive dataset of Portuguese manufacturing firms and applying parametric and semi-parametric approaches, we found that, in eleven of the eighteen analyzed regions, firm growth is related to firm size and therefore firms have no equal probabilities of attaining a particular growth rate within any given period. Moreover, the results uncovered that firms experience serial correlation in their growth patterns in all regions and region-specific characteristics, such as industrial diversity, entrepreneurship potential, and workforce qualities, engender differences in the way firms grow. Thus, this paper adds to the literature by showing how geographic location matters to firm size and growth.

Barbosa, Natália; Eiriz, Vasco (2011). Regional variation of firm size and growth - The Portuguese Case. Growth & Change 42(2): 125-158.

© Vasco Eiriz. Design by Fearne.