TY - JOUR
T1 - The dynamic adjustment process of firm entry and exit in manufacturing and finance, insurance, and real estate
AU - Troske, Kenneth R.
PY - 1996
Y1 - 1996
N2 - This article examines the dynamic adjustment process of firm entry and exit in manufacturing and finance, insurance, and real estate (FIRE). The object is to extend our knowledge of firm dynamics to include firm exit as well as nonmanufacturing firms. This interindustry comparison of firm dynamics uses a unique longitudinal firm-level data set containing over 13,000 firms. I report three main findings. First, in both industries firm entry is characterized by a decline in the first two moments of the growth rate distribution and by a rise in the first two moments of the relative firm size distribution as firms age. Second, in both industries firm exit is characterized by falling mean growth rates and mean relative firm size for a number of periods prior to exit. Third, relative to FIRE, firm entry and exit in manufacturing is a longer process and involves larger adjustments in relative firm size.
AB - This article examines the dynamic adjustment process of firm entry and exit in manufacturing and finance, insurance, and real estate (FIRE). The object is to extend our knowledge of firm dynamics to include firm exit as well as nonmanufacturing firms. This interindustry comparison of firm dynamics uses a unique longitudinal firm-level data set containing over 13,000 firms. I report three main findings. First, in both industries firm entry is characterized by a decline in the first two moments of the growth rate distribution and by a rise in the first two moments of the relative firm size distribution as firms age. Second, in both industries firm exit is characterized by falling mean growth rates and mean relative firm size for a number of periods prior to exit. Third, relative to FIRE, firm entry and exit in manufacturing is a longer process and involves larger adjustments in relative firm size.
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U2 - 10.1086/467363
DO - 10.1086/467363
M3 - Article
AN - SCOPUS:0030527072
SN - 0022-2186
VL - 39
SP - 705
EP - 735
JO - Journal of Law and Economics
JF - Journal of Law and Economics
IS - 2
ER -