Are Large Firms Born or Made? : Evidence from Developing Countries
This paper uses survey data from 120 developing countries to compare the role of institutions with firm characteristics at the time of creation of the firm in explaining the size, growth, and productivity of firms over their lifecycle. The study fi...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/08/24960357/large-firms-born-or-made-evidence-developing-countries http://hdl.handle.net/10986/22671 |
| Summary: | This paper uses survey data from 120
developing countries to compare the role of institutions
with firm characteristics at the time of creation of the
firm in explaining the size, growth, and productivity of
firms over their lifecycle. The study finds that firm-level
characteristics have comparable, and sometimes even larger,
power than institutional factors in predicting size and
growth, but not productivity. In particular, size at birth
plays a key role in predicting variation in firm size and
growth since birth over the firm lifecycle, whereas country
factors dominate in predicting variation in labor
productivity over the firm lifecycle. The study also finds
that older firms are larger, partly because of the selection
of more efficient firms. The findings point to the
importance of initial founding conditions in explaining
variations in size and growth over the firm lifecycle across countries. |
|---|