Firm Dynamics in Manufacturing and Services: A Broken Mirror?
Posted: 22 Jun 2008
Date Written: June 2007
This article represents a first attempt in exploring firm dynamics in the service industry as a whole. A huge body of empirical literature is focused on manufacturing firms, while only recent contributions shed some light in selected services sectors. Using a unique data set from the Italian National Institute for Social Security (INPS), we compare the patterns of entry, growth, and survival performance of firms belonging to the manufacturing and to the service industry. It turns out that industry dynamics in services, in terms of stylized facts, seem to mirror the one in manufacturing. Moreover, the positive impact of firm size on survival is reduced when age is controlled for, suggesting the existence of a learning mechanism, more pronounced in manufacturing than in services.
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