Search

Working Paper No. 94. Comparative Analysis of Firm Dynamics by Size

PublicationWorking paper
Almas Heshmati, Företagandets villkor, Företagsstorlek, Inha Oh, Jeong-Dong Lee, SMEs

Abstract

The Korean economy severely suffered from the Asian financial crisis, and is well known for rapid recovery in the years following. However, the recovery was mainly due to successful restructuring by a limited number of large-sized enterprises (LSEs). The small and medium sized enterprises (SMEs) are still suffering from the depression. The crisis and subsequent unequal size related recovery patterns have aggravated the pre-crisis gap between LSEs and SMEs. In this paper, the total factor productivity (TFP) of the South Korean manufacturing industry is calculated, at the firm level, and comparative analysis is performed by size classes. The sources of the TFP growth are decomposed into various effects related to entry, exit, and survival of firms. Additional survival analyses are used to investigate internal and external determinant variables for the survival of LSEs and SMEs. The results indicate that the exit of SMEs with higher productivity rates represented a major problem in Korean manufacturing, particularly in the post-crisis period. Non-selective government support for SMEs appears to have caused disorder in the SME sector.

Related content: Comparative Analysis of Plant Dynamics by Size: Korean Manufacturing.

Oh, I., Heshmati, A., Baek, C. & Lee, J-D. (2006). Comparative Analysis of Firm Dynamics by Size: Korean Manufacturing. Ratio Working Paper No. 94.

Based on content

Working Paper No. 94. Comparative Analysis of Firm Dynamics by Size
Working paperPublication
Oh, I., Heshmati, A., Baek, C. & Lee, J-D.
Publication year

2006

Abstract

The Korean economy severely suffered from the Asian financial crisis, and is well known for rapid recovery in the years following. However, the recovery was mainly due to successful restructuring by a limited number of large-sized enterprises (LSEs). The small and medium sized enterprises (SMEs) are still suffering from the depression. The crisis and subsequent unequal size related recovery patterns have aggravated the pre-crisis gap between LSEs and SMEs. In this paper, the total factor productivity (TFP) of the South Korean manufacturing industry is calculated, at the firm level, and comparative analysis is performed by size classes. The sources of the TFP growth are decomposed into various effects related to entry, exit, and survival of firms. Additional survival analyses are used to investigate internal and external determinant variables for the survival of LSEs and SMEs. The results indicate that the exit of SMEs with higher productivity rates represented a major problem in Korean manufacturing, particularly in the post-crisis period. Non-selective government support for SMEs appears to have caused disorder in the SME sector.

Related content: Comparative Analysis of Plant Dynamics by Size: Korean Manufacturing.

Working Paper No. 94. Comparative Analysis of Firm Dynamics by Size
Working paperPublication
Oh, I., Heshmati, A., Baek, C. & Lee, J-D.
Publication year

2006

Abstract

The Korean economy severely suffered from the Asian financial crisis, and is well known for rapid recovery in the years following. However, the recovery was mainly due to successful restructuring by a limited number of large-sized enterprises (LSEs). The small and medium sized enterprises (SMEs) are still suffering from the depression. The crisis and subsequent unequal size related recovery patterns have aggravated the pre-crisis gap between LSEs and SMEs. In this paper, the total factor productivity (TFP) of the South Korean manufacturing industry is calculated, at the firm level, and comparative analysis is performed by size classes. The sources of the TFP growth are decomposed into various effects related to entry, exit, and survival of firms. Additional survival analyses are used to investigate internal and external determinant variables for the survival of LSEs and SMEs. The results indicate that the exit of SMEs with higher productivity rates represented a major problem in Korean manufacturing, particularly in the post-crisis period. Non-selective government support for SMEs appears to have caused disorder in the SME sector.

Related content: Comparative Analysis of Plant Dynamics by Size: Korean Manufacturing.

Ratio Working Paper No. 349: Industrial conflict in essential services in a new era – Swedish rules in a comparative perspective
Working paperPublication
Karlson, N.
Publication year

2021

Published in

Ratio Working Paper

Abstract

This paper examines whether the Swedish regulatory system of dealing with industrial conflicts that affect essential services need an update or reform. Are the existing rules effective in a world where many essential services are upheld by many interdependent agents in complex systems where every single node becomes critical for the functioning of the system, and where the essential service activities could be either private or public? A comparative study is conducted with the corresponding regulatory systems of the United Kingdom, Germany, and Denmark.
The conclusion is that Sweden is a special case. The Swedish protection against and readiness in dealing with societally harmful industrial conflicts in essential services is weaker than in the countries of comparison. Just as in relation to other threats to essential services, it is not sustainable to claim that just because such a threat is not currently present, there would be no need for preparedness.
There are many alternative ways to handle this. Desirable methods should both prevent harmful conflicts from erupting and end conflicts that have grown harmful to society at a later stage. The labour market organisations should have a mutual interest in reforming the rules.

Show more