Firm Size, Life Cycle Dynamics and Growth Constraints: Evidence from Mexico

May 2, 2019

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Format: Chicago

Christian Saborowski, and Florian Misch. Firm Size, Life Cycle Dynamics and Growth Constraints: Evidence from Mexico, (USA: International Monetary Fund, 2019) accessed September 18, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper examines the variation in life cycle growth across the universe of Mexican firms. We establish two stylized facts to motivate our analysis: first, we show that firm size matters for development by illustrating a close correlation with state-level per capita incomes. Second, we show that few firms grow as much as their U.S. peers while the majority stagnates at less than twice their initial size. To gain insights into the distinguishing characteristics of the two groups, we then econometrically decompose life cycle growth across firms. We find that firms that have financial access and multiple establishments and that are formal, part of diversified industries and located in population centers can grow at sizeable rates.

Subject: Economic sectors, Labor, Manufacturing

Keywords: Distortions, Firm growth, Firm size, Firm structure, Growth rate, Life cycle dynamics, Life cycle growth, Manufacturing, North America, Preventing firm, Service sector firm, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/087
Stock No:

WPIEA2019087
ISBN:

9781498311137
ISSN:

1018-5941

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