Theories of Firms' Growth and the Generation of Jobs
- Cite this article as:
- Hart, P.E. Review of Industrial Organization (2000) 17: 229. doi:10.1023/A:1007887626165
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This paper relates recent empiricalresearch on the growth of U.K. companies to the maineconomic theories of firms' growth and to empiricalresults for the U.S.A. Smaller and younger firms havebeen growing more quickly than larger and older firms, thus generating proportionately more new jobs. Theseresults do not support the various theories of staticand dynamic economies of scale. Serial correlation ofgrowth is very low, so success does not persist. Thesystematic tendency for small and younger firms togrow more quickly is the main reason why firm growthis not entirely stochastic.