Size, age and firm growth in the Indian manufacturing sector

The conventional wisdom on the relationship of firm growth with its size and age is typically based on the studies in developed economies. In contrast, this study analyses the firm growth patterns for an emerging economy, namely India. It uses a balanced panel of 392 manufacturing firms over the yea...

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Bibliographic Details
Published in:Applied economics letters 2002-07, Vol.9 (9), p.607-613
Main Authors: Shanmugam, K. R., Bhaduri, Saumitra N.
Format: Article
Language:English
Subjects:
Applied economics
Developing countries
Economic growth
Enterprises
India
Manufacturing
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Summary:The conventional wisdom on the relationship of firm growth with its size and age is typically based on the studies in developed economies. In contrast, this study analyses the firm growth patterns for an emerging economy, namely India. It uses a balanced panel of 392 manufacturing firms over the years 1989-1990 to 1992-1993 to explore unobserved heterogeneity among firms. Results indicate that age positively influences growth, which is the opposite of the result obtained in previous studies. The current size negatively impacts growth as in earlier studies. Results also indicate that smaller and older firms grow faster than their counterparts. Size effect is larger in food industry while the age effect is larger in non-metal industry.
ISSN:1350-4851
1466-4291
DOI:10.1080/13504850110112035