Arbeitspapier

Institutional Effects on the Evolution of the Size Distribution of Firms

In this paper it is argued that the size distribution of firms may largely be determined by institutional factors. This hypothesis is tested in an exploratory fashion by studying the evolution of the size distribution of firms over time in Sweden for a period spanning from the late 1960s to the early 1990s. The data used is divided into finer size classes compared to most previous studies. This gives more scope for investigating the impact of institutions. Moreover, we use a unique data set, starting in 1984, to take account of corporate groups and government ownership. The analysis shows a poor development for intermediate-sized (10-199 employees) firms. This is likely to reflect the existence of a threshold that many firms are either unwilling or unable to cross. The analysis of the institutions and rules of the game determining the entrepreneurial and business conditions in Sweden indicate that the conditions have been unfavorable for small firms, and hence that too few small firms have managed to grow out of the smallest size classes. The conclusion is supported by an international comparison of the number of firms in different size classes. Data indicate that Sweden has fewer small (10-99) employees), and more large (500+) firms per capita than other European countries.

Language
Englisch

Bibliographic citation
Series: IUI Working Paper ; No. 497

Classification
Wirtschaft
Fiscal Policies and Behavior of Economic Agents: General
Labor Force and Employment, Size, and Structure
Industrial Policy; Sectoral Planning Methods
Subject
Business taxation
Industrial policy
Industrial structure
Size distribution
Betriebsgrößenstruktur
Industriepolitik
Schweden

Event
Geistige Schöpfung
(who)
Henrekson, Magnus
Johansson, Dan
Event
Veröffentlichung
(who)
The Research Institute of Industrial Economics (IUI)
(where)
Stockholm
(when)
1998

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Henrekson, Magnus
  • Johansson, Dan
  • The Research Institute of Industrial Economics (IUI)

Time of origin

  • 1998

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