The Evolution of the Distribution of Plant Size: Evidence from Luxemburg

• Published in: Small business economics Vol. 27; no. 4/5; pp. 301 - 311
• Main Authors: Bertinelli, Luisito, Cardi, Olivier, Pamukçu, Teoman, Strobl, Eric
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer 01-12-2006; Springer Nature B.V
• Subjects: Age; Age groups; Breakdowns; Density estimation; Economic theory; Employment; Employment statistics; Industrial plants; Manufacturing; Manufacturing industries; Plant age; Proxy reporting; Proxy statements; Random variables; Size; Size distribution; Skewness; Startups; Studies; Tenure; Luxembourg
• ISSN: 0921-898X; 1573-0913
• DOI: 10.1007/s11187-005-8571-z

In a recent paper, [Cabral, L. M. B. and J. Mata, 2003, American Economic Review, 93, 1075-1090] using Portuguese manufacturing data have shown for the first time that the plant size distribution is significantly right-skewed at the early part of the life cycle and then changes to become more log- normal. Using a similar proxy for plant age we compare this stylised fact for both Luxembourg manufacturing and services. Use of plants' true age, however, reveals that the size distribution reverses back towards right-skewness for very old plants. We confirm the finding that the right-skewness is likely driven by financial constraints.