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on Technology and Industrial Dynamics |
| By: | Stephan, Andreas (Jönköping International Business School); Badunenko, Oleg (German Institute for Economic Research, DIW Berlin); Fritsch, Michael (Friedrich Schiller University Jena) |
| Abstract: | This paper investigates the factors that explain the level and dynamics of productive efficiency of a manufacturing firm. In our empirical analysis, we use a unique sample of about 39,000 firms in 256 industries from the German Cost Structure Census over the years 1992–2005. We estimate the efficiencies of the firms and relate them to firm-specific and environmental factors. <p> We find that (1) about half of the model’s explanatory power is due to industry effects, (2) that firm size accounts for another twenty percent, and (3) that the headquarters’ location explains approximately fifteen percent. <p> Interestingly, most other firm characteristics such as R&D intensity, outsourcing activities or the number of owners have an extremely small explanatory power. Surprisingly, our findings suggest that higher R&D intensity is associated with being less efficient, though higher R&D spending increases a firm’s efficiency over time. |
| Keywords: | Frontier analysis; determinants of efficiency; firm performance; industry effects; regional effects; firm size |
| JEL: | D24 L10 L25 |
| Date: | 2008–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hjiseg:0004&r=tid |
| By: | Yu, Li; Jolly, Robert W.; Orazem, Peter |
| Abstract: | This paper uses the pattern of firm entry and exit to develop a classification system for industries. The classifications include urban-rural bias; long-term growth; and firm survival patterns. The first captures the fact that sector-specific economic growth may be favored in urban areas for some industries and may benefit from low population density for others. Some industries have experienced long-term expansion in firm numbers while others have experienced a decline. Finally, some industries are characterized by high rates of both entry and exit while others have low rates of both. A taxonomy classifying industries according to those three criteria is developed in this paper. The taxonomy is applied to the Iowa subset of the National Establishment Time-Series (NETS) database over the period from 1992 to 2004. County level entry and exit rates are shown to be positively correlated across nearly all 2 digit NAICS code industries. Industry growth is found to be biased against rural areas. Not all of the industries experienced expansion or have a positive net entry rate. Entry of new firms replaces old incumbent firms in each industry but to different degrees. Understanding firm entry - exit pattern can help design customized policies of fostering expansion of specific industries in Iowa according to their location bias, industry growth patterns and development dynamics. |
| Keywords: | Entry – Exit Pattern, Taxonomy, Location Bias, Expansion, Churning, Entrepreneurship, Economic Development |
| Date: | 2008–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:13007&r=tid |