Firm Growth, European Industry Dynamics and Domestic Business Cycles

22 Pages Posted: 5 Jun 2012

See all articles by Harald Oberhofer

Harald Oberhofer

Vienna University of Economics and Business - Department of Economics; Austrian Institute of Economic Research (WIFO)

Date Written: July 2012

Abstract

Based on the empirical firm growth literature and on heterogeneous (microeconomic) adjustment models, this paper empirically investigates the impact of European industry fluctuations and domestic business cycles on the growth performance of European firms. Since the implementation of the Single Market Program the 27 EU member states share a common market. Accordingly, the European industry business cycle is expected to become a more influential predictor of European firms’ behavior at the expense of domestic fluctuations. Empirically, the results of a two‐part model for a sample of European manufacturing firms reject this hypothesis. In addition, exporting firms and subsidiaries of multinational enterprises constitute the most stable firm cohort throughout the observed business cycle.

Suggested Citation

Oberhofer, Harald, Firm Growth, European Industry Dynamics and Domestic Business Cycles (July 2012). Scottish Journal of Political Economy, Vol. 59, Issue 3, pp. 316-337, 2012, Available at SSRN: https://ssrn.com/abstract=2077373 or http://dx.doi.org/10.1111/j.1467-9485.2012.00583.x

Harald Oberhofer (Contact Author)

Vienna University of Economics and Business - Department of Economics ( email )

Welthandelsplatz 1
A-1020 Vienna
Austria

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

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