On the autocorrelation of growth rates: Evidence for micro, small and large firms from the Austrian Service Industries, 1975-2004

Alex Coad, Werner Hölzl

Research output: Contribution to journalArticle

50 Citations (Scopus)

Abstract

This paper studies the serial autocorrelation of annual growth rates in employment for selected Austrian service industries over a 30-year period using quantile regression techniques. The autocorrelation of growth rates provides important information on firms growth processes. We find that the growth patterns of micro firms are strikingly different from the growth patterns of small, medium-sized and larger firms. First, we do find a positive dependency of growth on size for growing micro firms, while this relationship is negative for the other size groups. Second, growing micro firms are subject to negative autocorrelation of annual growth rates making sustained growth a very rate occurrence, while larger growing firms usually display a positive autocorrelation suggesting that high growth episodes of larger firms stretch over a longer time horizon. This indicates that the growth of micro firms in particular is characterized by a rather lumpy growth profile. Furthermore, we find that the autocorrelation patterns are asymmetric with regard to decline and growth.

Original languageEnglish
Pages (from-to)139-166
Number of pages28
JournalJournal of Industry, Competition and Trade
Volume9
Issue number2
DOIs
Publication statusPublished - 2009
Externally publishedYes

Keywords

  • Austria
  • Firm growth
  • Quantile regression
  • Serial correlation
  • Service sector

ASJC Scopus subject areas

  • Industrial relations

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