Portal de Periódicos da CAPES

Regional Variation of Firm Size and Growth: The Portuguese Case

2011; Wiley; Volume: 42; Issue: 2 Linguagem: Inglês

10.1111/j.1468-2257.2011.00547.x

1468-2257

Natália Barbosa, Vasco Eiriz,

Labor market dynamics and wage inequality

This paper analyses the patterns of firm growth of manufacturing firms across Portuguese regions. In particular, we compare firm size and growth in order to investigate 1) whether region-specific characteristics, interpreted as generating localization economies, exert any influence on firm growth and size, and 2) whether there is evidence of persistence in firm growth across regions. Using an extensive dataset of Portuguese manufacturing firms and applying parametric and semi-parametric approaches, we found that, in eleven of the eighteen analyzed regions, firm growth is related to firm size and therefore firms have no equal probabilities of attaining a particular growth rate within any given period. Moreover, the results uncovered that firms experience serial correlation in their growth patterns in all regions and region-specific characteristics, such as industrial diversity, entrepreneurship potential, and workforce qualities, engender differences in the way firms grow. Thus, this paper adds to the literature by showing how geographic location matters to firm size and growth.