Do Firms Share the Same Functional Form of Their Growth Rate Distribution? A Statistical Test

51 Pages Posted: 18 Mar 2011 Last revised: 23 Nov 2013

See all articles by José T. Lunardi

José T. Lunardi

Universidade Estadual de Ponta Grossa - Departamento de Matematica e Estatistica

Salvatore Miccichè

University of Palermo - Department of Physics and Chemistry

Fabrizio Lillo

Università di Bologna

Rosario N. Mantegna

University of Palermo

Mauro Gallegati

Polytechnic University of Marche - Faculty of Economics

Date Written: November 18, 2013

Abstract

We propose a hypothesis testing procedure to investigate whether the same growth rate distribution is shared by all the firms in a balanced panel or, more generally, whether they share the same functional form for this distribution, without necessarily sharing the same parameters. We apply the test to panels of US and European Union publicly quoted manufacturing firms, both at the sectoral and at the subsectoral NAICS levels. We consider the following null hypotheses about the growth rate distribution of the individual firms: i) an unknown shape common to all firms, with all the firms sharing also the same parameters, or with the firm variance related to its firm size through a scaling relationship, and ii) several functional shapes described the Subbotin family of distributions. Our empirical results indicate that firms do not have a common shape of the growth rate distribution at the sectorial NAICS level, whereas firms may typically be described by the same shape of the distribution at the subsectorial level, even if the specific shape may not be the same for different subsectors.

Suggested Citation

Lunardi, José T. and Miccichè, Salvatore and Lillo, Fabrizio and Mantegna, Rosario Nunzio and Gallegati, Mauro, Do Firms Share the Same Functional Form of Their Growth Rate Distribution? A Statistical Test (November 18, 2013). Available at SSRN: https://ssrn.com/abstract=1786861 or http://dx.doi.org/10.2139/ssrn.1786861

José T. Lunardi

Universidade Estadual de Ponta Grossa - Departamento de Matematica e Estatistica ( email )

Avenida General Carlos Cavalcanti 4748
Ponta Grossa, PR 84032-900
Brazil

Salvatore Miccichè

University of Palermo - Department of Physics and Chemistry ( email )

Viale delle Scienze, Ed. 17
Palermo, PA 90128
Italy
+3909123899145 (Phone)

HOME PAGE: http://www.unipa.it/~salvatore.micciche

Fabrizio Lillo

Università di Bologna ( email )

Via Zamboni, 33
Bologna, 40126
Italy

Rosario Nunzio Mantegna (Contact Author)

University of Palermo ( email )

Dipartimento di Fisica e Chimica
Viale delle Scienze, Edificio 18
Palermo, PA I-90128
Italy
+3909123899074 (Phone)
+3909123860815 (Fax)

HOME PAGE: http://www.unipa.it/persone/docenti/m/rosario.mantegna

Mauro Gallegati

Polytechnic University of Marche - Faculty of Economics ( email )

Piazzale Martelli, 8
60121 Ancona
Italy
++390712207188 (Phone)
++390712207102 (Fax)

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