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Working paper No. 215. Identifying High-Growth Firms

PublicationWorking paper
Daniel Halvarsson, Företagandets villkor, Företagstillväxt, High-growth firms, Laplace distribution, Power law
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Abstract

This paper investigates the role(s) of high-growth firms (HGFs) in the robust growth-rate distribution. HGFs are identified as firms for which the growth-rate distribution exhibits power-law decay. In contrast to the traditional means of identifying HGFs, a distributional approach eliminates the need to specify an arbitrary growth rate or percentage share. The latter approach is illustrated by the growth-rate distribution for Swedish data on incorporated firms at the aggregate level and at the 2-digit industry level. The empirical results indicate that a power law is sometimes present in the growth-rate distribution and suggest that HGFs are rarer than previously thought.

Halvarsson, D. (2013). ”Identifying High-Growth Firms”. Ratio Working paper No. 215.

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Working paper No. 216. On the Estimation of Skewed Geometric Stable Distribution
Working paperPublication
Halvarsson, D.
Publication year

2013

Abstract

The increasing interest in the application of geometric stable distributions has lead to a need for appropriate estimators. Building on recent procedures for estimating the Linnik distribution, this paper develops two estimators for the geometric stable distribution. Closed form expressions are provided for the signed and unsigned fractional moments of the distribution. The estimators are then derived using the methods of fractional lower order moments and that of logarithmic moments. Their performance is tested on simulated data, where the lower order estimators, in particular, are found to give efficient results over most of the parameter space.

Halvarsson, D. (2013). ”On the Estimation of Skewed Geometric Stable Distribution”. Ratio Working paper No. 216.

Working paper No. 214. Industry Dierences in the Firm Size Distribution
Working paperPublication
Halvarsson, D.
Publication year

2013

Abstract

This paper empirically examines industry determinants of the shape of Swedish firm size distributions at the 3-digit (NACE) industry level between 1999-2004 for surviving firms. Recent theoretical studies have begun to develop a better understanding of the causal mechanisms behind the shape of firm size distributions. At the same time there is a growing need for more systematic empirical research. This paper therefore presents a two-stage empirical model, in which the shape parameters of the size distribution are estimated in a first stage, with firm size measured as number of employees. In a second stage regression analysis, a number of hypotheses regarding economic variables that may determine the distributional shape are tested. The result from the first step are largely consistent with previous statistical findings confirming a power law. The main finding, however, is that increases in industry capital and financial constraint exert a considerable influence on the size distribution, shaping it over time towards thinner tails, and hence fewer large firms.

Halvarsson, D. (2013). ”Industry Dierences in the Firm Size Distribution”. Ratio Working paper no 214.

Ratio Working Paper No. 327: Asymmetric Double Pareto Distributions: Maximum Likelihood Estimation with Application to the Growth Rate Distribution of Firms
Working paperPublication
Halvarsson, D.
Publication year

2019

Published in

Ratio Working Paper

Abstract

This paper considers a flexible class of asymmetric double Pareto distributions (ADP) that allows for skewness and asymmetric heavy tails. The inference problem is examined for maximum likelihood. Consistency is proven for the general case when all parameters are unknown. After deriving the Fisher information matrix, asymptotic normality and efficiency are established for a restricted model with the location parameter known. The asymptotic properties of the estimators are then examined using Monte Carlo simulations. To assess its goodness of fit, the ADP is applied to companies’ growth rates, for which it is unequivocally favored over competing models.

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