Firm size distribution and employment fluctuations

Theory and evidence

Holger Görg, Philipp Henze, Viroj Jienwatcharamongkhol, Daniel Kopasker, Hassan Molana, Catia Montagna (Lead / Corresponding author), Fredrik Sjöholm

    Research output: Contribution to journalArticle

    1 Citation (Scopus)
    31 Downloads (Pure)

    Abstract

    We show that the firm-size distribution is an important determinant of the relationship between an industry's employment and output. A theoretical model predicts that changes in demand for an industry's output have larger effects on employment, resulting from adjustments at both the intensive and extensive margin, in industries characterised by a distribution that has a lower density of large firms. Industry-specific shape parameters of the firm size distributions are estimated using firm-level data from Germany, Sweden and the UK, and used to augment a relationship between industry-level employment and output. The empirical results align with the predictions of the theory.

    Original languageEnglish
    Pages (from-to)690-703
    Number of pages14
    JournalResearch in Economics
    Volume71
    Issue number4
    Early online date18 Sep 2017
    DOIs
    Publication statusPublished - Dec 2017

    Fingerprint

    Fluctuations
    Industry
    Firm size distribution
    Germany
    Prediction
    Large firms
    Intensive margin
    Sweden
    Extensive margin
    Firm-level data
    Empirical results

    Keywords

    • Employment
    • Firm distribution
    • Firm size
    • Fluctuations

    Cite this

    Görg, H., Henze, P., Jienwatcharamongkhol, V., Kopasker, D., Molana, H., Montagna, C., & Sjöholm, F. (2017). Firm size distribution and employment fluctuations: Theory and evidence. Research in Economics, 71(4), 690-703. https://doi.org/10.1016/j.rie.2017.09.002
    Görg, Holger ; Henze, Philipp ; Jienwatcharamongkhol, Viroj ; Kopasker, Daniel ; Molana, Hassan ; Montagna, Catia ; Sjöholm, Fredrik. / Firm size distribution and employment fluctuations : Theory and evidence. In: Research in Economics. 2017 ; Vol. 71, No. 4. pp. 690-703.
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    Görg, H, Henze, P, Jienwatcharamongkhol, V, Kopasker, D, Molana, H, Montagna, C & Sjöholm, F 2017, 'Firm size distribution and employment fluctuations: Theory and evidence', Research in Economics, vol. 71, no. 4, pp. 690-703. https://doi.org/10.1016/j.rie.2017.09.002

    Firm size distribution and employment fluctuations : Theory and evidence. / Görg, Holger; Henze, Philipp; Jienwatcharamongkhol, Viroj; Kopasker, Daniel; Molana, Hassan; Montagna, Catia (Lead / Corresponding author); Sjöholm, Fredrik.

    In: Research in Economics, Vol. 71, No. 4, 12.2017, p. 690-703.

    Research output: Contribution to journalArticle

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    AU - Kopasker, Daniel

    AU - Molana, Hassan

    AU - Montagna, Catia

    AU - Sjöholm, Fredrik

    N1 - This research was supported by the NORFACE ERA-NET (New Opportunities for Research Funding Agency Co-operation in Europe Network) Welfare State Futures Programme, Grant Number 462-14-120.

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    Görg H, Henze P, Jienwatcharamongkhol V, Kopasker D, Molana H, Montagna C et al. Firm size distribution and employment fluctuations: Theory and evidence. Research in Economics. 2017 Dec;71(4):690-703. https://doi.org/10.1016/j.rie.2017.09.002