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

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Florian Misch
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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 087
Language:
English
Publication Date:
02 May 2019
DOI:
https://doi.org/10.5089/9781498311137.001
ISBN:
9781498311137
ISSN:
1018-5941
Pages:
25
Keywords:
WP; life cycle growth; firm size; growth rate; preventing firm; Firm growth; Life cycle dynamics; Distortions; firm structure; service sector firm; Manufacturing; North America
Legal-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.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2019: Issue 087