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Growth volatility and size: a firm-level study

Calvino, Flavio, Criscuolo, Chiara, Menon, Carlo and Secchi, Angelo (2018) Growth volatility and size: a firm-level study. Journal of Economic Dynamics and Control, 90. pp. 390-407. ISSN 0165-1889

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Identification Number: 10.1016/j.jedc.2018.04.001


This paper provides a systematic cross-country investigation of the relation between a firm’s growth volatility and its size. For the first time the analysis is carried out using comparable and representative sets of data sourced by official business registers of an important number of countries. We show that there exists a robust negative relation between growth volatility and size with an average elasticity equal to −0.18. We check the robustness of this result against a number of potential sources of bias and in particular with respect to sectoral disaggregation and against the inclusion of firm age. Our result is consistent with the idea that independently from specific country characteristics there exists a common underlying mechanism driving the elasticity between size and growth volatility. We then propose two mechanisms able to explain our result and we conclude discussing its relevance with respect to the recent literature on granularity.

Item Type: Article
Official URL:
Additional Information: © 2018 Elsevier B.V.
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HB Economic Theory
JEL classification: D - Microeconomics > D2 - Production and Organizations > D20 - General
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales
Date Deposited: 20 Apr 2018 13:41
Last Modified: 20 Oct 2021 00:38
Projects: 649186
Funders: European Union’s Horizon 2020 Research and Innovation Programme, French National Research Agency

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