Corporate Growth, Age and Ownership Structure: Empirical Evidence in Spanish firms/Kompanijos Dydis, Amzius Ir Nuosavybes Struktura: Empirinis Tyrimas Ispanijos Imonese

Article excerpt

1. Introduction

The concept of corporate mobility refers to the process of entry into and exit from markets of firms and their units. This flow has been one of the most useful means of explaining the evolution of companies and their adaptation to their environment. All this has been the object of much attention from the theoretical perspective, but it has not had the equivalent empirical attention until recently, perhaps due in large part to the difficulty of measuring it statistically as Baldwin, Geroski (1989). In particular, most research on firm turnover and the factors characterising it focuses on the industrial sector, where authors such as Dunne et al. (1988), Acs and Audretsch (1990), Baldwin (1995), Sutton (1997), Caves (1998), Arauzo and Segarra (2005), Rinaldi (2008) find certain regularities in the dynamics of firms in markets.

Market entry and exit of firms or units is an interesting way of observing the evolution and adaptation of these productive units to their environments. In this respect, the literature appears to indicate that although the theoretical perspective has been object of attention, the empirical aspect has been somewhat neglected, with analysis of firm creation and survival concentrating on manufacturing sectors.

In this context, the objective of this work is to analyze corporate mobility among the different sectors of the Spanish economy (according to their 1-digit CNAE codes (1), comparing new entrants (ex novo) and established firms. Within this process of firm mobility analyzed in this work, we attempt to provide answers to the following questions: i) how do firms enter markets according to the different annual cohorts and considering the sector of activity? In this respect, we consider the size of the new entrants compared to the size of the established firms. This leads us to ask: ii) can we explain the firms' evolution after entering the market (post-entry behavior? If yes, do firms of different sectors, ages or growth rates behave similarly? iii) In terms of firms' evolution in their markets, do small or medium-sized firms grow faster than large ones? Is the age of the firm a determinant of its dynamics? From work such as that of Evans (1987) and Hall (1987) we observe the existence of a positive relation between a firm's size and its probability of survival.

There have been relatively few studies tackling these questions in general terms and in particular for the case of Spain until recent times. In consequence, we class this work among the group of novel analyses necessary to understand the corporate spirit in Spain. If there are not many empirical works studying topics relating to firm creation and consolidation, there are even fewer analyzing the behavior and trajectories of firms beyond the initial period of mortality of young firms.

Analyzing the questions posed in this work about the behavior of firms entering or exiting markets or established firms, as well as the factors that characterize them, should help company managers understand not only how the resources and capabilities in terms of size and accumulated experience evolve in a sector of activity, but also how they best adjust under the perspectives of both new entrants and established firms.

This work is organized as follows: in the second section we present the theoretical literatures in corporate dynamism. The third section is concerned with the data. Section 4 describes empirical analysis and results, beginning first with the characteristics of the new entrants, comparing new entrants and established firms in function of the sector of activity. The section closes with the growth of the established firms, its relation with their age and size, and the firm's mobility and transition between sectors. Finally in Section 5 we provide a summary of the most relevant conclusions.

2. Theoretical literatures in corporate dynamism: mobility and transition

The different theories on corporate mobility provide us with guidelines in our attempt to answer the previous questions. …