Firm Size Distribution and Employment Fluctuations: Theory and Evidence
Research output: Contribution to journal › Article
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.
|Research areas and keywords||
Subject classification (UKÄ) – MANDATORY
|Journal||Research in Economics|
|Publication status||Published - 2017 Dec|
Related research output
Holger Görg, Philipp Henze, Viroj Jienwatcharamongkhol, Daniel Kopasker, Hassan Molana, Catia Montagna & Fredrik Sjöholm, 2016 Nov 18, Lund: Department of Economics, Lund University, 35 p. (Working Papers; vol. 2016, no. 32).
Research output: Working paper