Abstract
This paper studies how employment patterns and growth vary with establishment size in the Finnish manufacturing sector during the period 1980–94. The findings are compared with the predictions of alternative theories of firm growth. The paper also examines some aspects of job quality in different size categories, including wages, labour productivity, working hours, labour turnover and the persistence of jobs. According to the findings, small establishments create and destroy jobs relatively more than large establishments. In addition, in the smallest size categories both the share of gross job creation and the share of gross job destruction is larger than the share of employment. However, there is no clear relationship between establishment size and net employment change. Furthermore, after studying different aspects of job quality, we can conclude that the jobs offered by small and large establishments differ greatly in many respects and it is difficult to evaluate the total welfare effect.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Refererences
Audretsch, David, Enrico Santarelli and Marco Vivarelli, 1999, 'Start-up Size and Industrial Dynamics: Some Evidence from Italian Manufacturing', International Journal of Industrial Organization 17, 965–983.
Baldwin, John, 1998, 'Were Small Producers the Engines of Growth in the Canadian Manufacturing Sector in the 1980's?', Small Business Economics 10, 349–364.
Baldwin, John and Garnett Picot, 1995, 'Employment Generation by Small Producers in the Canadian Manufacturing Sector', Small Business Economics 7, 317–331.
Birch, David, 1981, 'Who Creates Jobs?', Public Interest 65, 3–14.
Broersma, Lourens and Pieter Gautier, 1997, 'Job Creation and Job Destruction by Small Firms: An Empirical Investigation for the Dutch Manufacturing Sector', Small Business Economics 9, 211–224.
Brown, Charles, James Hamilton and James Medoff, 1990, Employers Large and Small, Harvard University Press.
Burdett, Kenneth and Dale Mortensen, 1998, 'Wage Differentials, Employer Size, and Unemployment', International Economic Review 39, 257–273.
Burgess, Simon, Julia Lane and David Stevens, 1994, 'Job Flows, Worker Flows and Churning', CEPR Discussion Paper 1125.
Cabral, Luis, 1995, 'Sunk Costs, Firm Size and Firm Growth', Journal of Industrial Economics 43(2), 161–172.
Davis, Steven, John Haltiwanger and Scott Schuh, 1996, Job Creation and Destruction, MIT Press.
Drolet, Marie and René Morissette, 1998, 'Recent Canadian Evidence on Job Quality by Firm Size', Analytical Studies Branch – Research Paper Series, Statistics Canada No. 128.
Dunne, Paul and Alan Hughes, 1994, 'Age, Size, Growth and Survival: U.K. Companies in the 1980s', Journal of Industrial Economics 42, 115–140.
Dunne, Timothy, Mark Roberts and Larry Samuelson, 1989, 'The Growth and Failure of U.S. Manufacturing Plants', Quarterly Journal of Economics 104(4), 671–698.
Evans, David, 1987, 'Tests of Alternative Theories of Firm Growth', Journal of Political Economy 95(4), 657–674.
Hall, Bronwyn, 1987, 'The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector', Journal of Industrial Economics 35(4), 583–605.
Hart, Peter and Nicholas Oulton, 1996, 'Growth and Size of Firms', Economic Journal 106, 1242–1252.
Hart, P. E. and S. J. Prais, 1956, 'The Analysis of Business Concentration: A Statistical Approach', Journal of the Royal Statistical Society 119 (Series A), 150–191.
Ilmakunnas, Pekka, Seppo Laaksonen and Mika Maliranta, 1999, 'Enterprise Demography and Job Flows', in J. Alho (ed.), Statistics, Registries, and Science: Experiences from Finland, Statistics Finland, pp. 73–88.
Jovanovic, Boyan, 1982, 'Selection and Evolution of Industry', Econometrica 50, 649–670.
Klette, Tor and Astrid Mathiassen, 1996, 'Job Creation, Job Destruction and Plant Turnover in Norvegian Manufacturing', Annales d'Économie et de Statistique 41/42, 97–125.
Laaksonen, Seppo and Ismo Teikari, 1999, 'Analysis of Effects of Reconstructed Business Units on Employment and Productivity: Longitudinal Study Using Synthetic Units of Finnish Manufacturing', in Silvia Biffignandi (ed.), Micro and Macro Data, Statistical Analysis and International Comparison, Physica Verlag.
Mansfield, Edwin, 1962, 'Entry, Gibrat's Law, Innovation and the Growth of Firms', American Economic Review 52, 1023–1051.
Mata, José, 1994, 'Firm Growth During Infancy', Small Business Economics 6, 27–39.
Pakes, Ariel and Richard Ericson, 1998, 'Empirical Implications of Alternative Models of Firm Dynamics', Journal of Economic Theory 79, 1–45.
Paoli, Pascal (ed.), 1997, Second European Survey of Working Conditions, European Foundation for the Improvement of Living and Working Conditions, Dublin.
Roberts, M. J., 1996, 'Employment Flows and Producer Turnover', in M. J. Roberts and J. R. Tybout (eds.), Industrial Evolution in Developing Countries: Micro Patterns of Turnover, Productivity and Market Structure, Oxford University Press, pp. 18–42.
Schmalensee, Richard, 1989, 'Inter-Industry Studies of Structure and Performance', in Richard Schmalensee and Robert Willig (eds.), Handbook of Industrial Organisation 2, North-Holland, Amsterdam, pp. 951–1009.
Sutton, John, 1997, 'Gibrat's Legacy', Journal of Economic Literature 35, 40–59.
Wagner, Joachim, 1995, 'Firm Size and Job Creation in Germany', Small Business Economics 7, 469–474.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Hohti, S. Job Flows and Job Quality by Establishment Size in the Finnish Manufacturing Sector 1980–94. Small Business Economics 15, 265–281 (2000). https://doi.org/10.1023/A:1011100911645
Issue Date:
DOI: https://doi.org/10.1023/A:1011100911645