Much of the research on industry dynamics focuses on the interdependence between the sectorial rates of entry and exit.This paper argues that the size of firms and the reaction-adjustment period are important conditions missed in this literature.I illustrate the effects of this omission using data from the Spanish manufacturing industries between 1994 and 2001.Estimates from systems of equations models provide evidence of a conical revolving door phenomenon and of partial adjustments in the replacement-displacement of large firms.
|Place of Publication||Tilburg|
|Number of pages||38|
|Publication status||Published - 2004|
|Name||CentER Discussion Paper|
- corporate size
- panel data