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Firm Growth, European Industry Dynamics and Domestic Business Cycles
Author(s) -
Oberhofer Harald
Publication year - 2012
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/j.1467-9485.2012.00583.x
Subject(s) - multinational corporation , subsidiary , business cycle , sample (material) , industrial organization , business , economics , manufacturing , monetary economics , macroeconomics , marketing , finance , chemistry , chromatography
Based on the empirical firm growth literature and on heterogeneous (microeconomic) adjustment models, this paper empirically investigates the impact of E uropean industry fluctuations and domestic business cycles on the growth performance of E uropean firms. Since the implementation of the S ingle M arket P rogram the 27 EU member states share a common market. Accordingly, the E uropean industry business cycle is expected to become a more influential predictor of E uropean firms’ behavior at the expense of domestic fluctuations. Empirically, the results of a two‐part model for a sample of E uropean 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.