2006/09 | LEM Working Paper Series | |
The Growth of Industrial Sectors: Theoretical Insights and Empirical Evidence from U.S. Manufacturing | ||
Sandro Sapio, Grid Thoma |
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Keywords | ||
Sectoral Growth, Subbotin Distribution, Scaling, U.S. Manufacturing.
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JEL Classifications | ||
C10, O47, O51.
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Abstract | ||
In this paper, we study the growth rates of 4-digit sectors in U.S. manufacturing. Two measures of size (value of shipments,
value added) are considered, for each of the 38 years (1959-1996) of a sample of 458 4-digit sectors, drawn from the NBER
Manufacturing Productivity database. Whole sample results are partly in line with firm growth facts: (i) sectoral growth rates
are distributed according to heavy-tailed Subbotin distributions, with shape coefficient between 1.0 (Laplace) and 1.5; (ii)
the volatility of growth rates is decreasing with respect to size, with a scaling exponent varying over time, but always between
-0.20 and -0.10. Preliminary analyses on more homogeneous groups cast doubts on the evidence of scaling, but leave basically
unaffected the distributional properties of sectoral growth. These results shed light on the role of inter-firm correlations,
market concentration, and positive intersectoral feedbacks as drivers of meso-economic dynamics.
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