Piero Ganugi

Statistical regularity of firm size distribution: the Pareto IV and truncated Yule for Italian SCI manufacturing

In this paper we model the firm size distribution (FSD) of Italian manufacturing firms of SCI, the GDP survey of ISTAT, by a continuous and a discrete distribution: the Pareto IV distribution on total assets and the Yule distribution on Number of Employees. The Pareto IV distribution is characterized by four parameters and shows a better fit than both the Lognormal and Pareto I, which are the distributions more frequently applied to model firm size. The Pareto IV is inconsistent with Gibrat’s Law according to which the different segments of an Industry are characterized by proportionate growth and the distribution of size is Lognormal. A truncation of the Yule distribution has been necessary because the dataset is characterized by firms with at least 20 employees. The truncated Yule distribution shows a good fit for medium–large firms (firms with more than 50 employees). The partition of the dataset in innovative and non-innovative firms – both of which are well described by the Pareto IV – reveals a beneficial effect of scale on innovation. Finally, the good fit of both distributions holds not only for the composite industry, but for the single sectors too.

Testing Gibrat's law in Italian macro-regions: Analysis on a panel of mechanical companies

The present paper deals with the question whether “Gibrats law” is applicable to Italian mechanical companies active between 1997 and 1999 or not. The analysis was carried out at a spatial level splitting companies in four macro-regions: North-West, North-East, Centre and South. On the basis of a set of descriptive and inferential tools, we find that firm size, measured by total assets, follows approximately a log-normal distribution in at least two of the four analyzed macro-regions. Nevertheless log-normality is only one necessary but not sufficient condition for the validity of the Gibrats law. Thus we analyzed the influence of firm size on growth rate finding a negative relation between the two variables in all macro-regions. This is a clear violation of Gibrats law. Another violation was found by the application of an econometric model which evidences the persistence of growth.

Firm Size Dynamics in an Industrial District: The Mover-Stayer Model in Action

In the last decade, the District of Prato (an important industrial area in the neighborhood of Florence, Italy) suffered a deep shrinkage of exports and added value of the textile industry, the core of its economy. In this paper we aim to investigate if such a crisis entailed a firm downsizing (evaluated as number of employees) of the same industry and, possibly, of the overall economy of the District. For this purpose we use the Mover Stayer Model. Data are represented by two panels from ASIA-ISTAT data. The main results of the analysis are that: (1) the textile industry is affected by a relevant downsizing of the firm size; (2) such a process takes place through a slightly changed level of concentration; (3) the mentioned changes does not seem to spread to the overall economy.

A new mobility index for transition matrices

In this work we construct a mobility index able to grasp the prevailing direction in the evolution of a given set of statistical units. We consider the case of dynamics ruled by a transition matrix, whose states are based on an ordered economic variable (firm size or income, among others) such that the future position of an individual can be better or worse than the current one. The existing indices measure only the absolute value of mobility, without providing information about the main direction in the dynamics. We propose here a whole family of directional indices defined as functions of the transition matrix, so that their absolute value measures the intensity of mobility, and their sign (

A Continuous Time Mover-Stayer Model for Labor Market in a Northern Italian Area

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Scale Economies and Heterogeneity in Business Money Demand: The Italian Experience

+/−) represents the prevailing direction towards improvement/worsening in the dynamics under study.

Firm Size Distribution and Returns to Scale. Non-Parametric Frontier Estimates from Italian Manufacturing

We propose here a new implementation of the forward search, which is a powerful general method usually suitable for detecting extreme observations and for determining their effect on fitted models (Atkinson and Riani, 2000). Through the forward search we iteratively fit the Pareto II distribution to firm size data. In particular, a threshold is fixed to the fit of the Pareto II distribution through a progressive adaptation technique, performing at each iteration the χ 2 test to check for the acceptance of the null hypothesis. Yearly Zipf-plots of the truncated empirical distribution with superimposed theoretical Pareto II distribution highlight the adherence of the estimates to data for different size ranges. Possible economic interpretations of the results are then provided, referring in particular to the role of the stock market in shaping firm size distribution and to the firm size effect (Banz, 1981; Reingaum, 1981). More in general, we discuss possible implications of introducing our methodology in macroeconomic models.

Comparing Capital Structure through Similarity Analysis: Evidence about two Industrial Districts

A new and powerful source of information concerning the Italian Labor Market is represented by C.OBB datasets, which record the kind of job contract (with its successive modifications) of all the workers in many Italian Provinces. By means of this information and focusing on the Province of Cremona, we analyze the mobility of employees among different kinds of job contracts (and unemployment also): in particular, from contracts characterized by modest packages of securities toward more structured working relations, ending with Unlimited Time Duration Contracts. The statistical tool used for this analysis is Continuous Time Mover-Stayer Model. Our analysis reveals low mobility from Limited Time Duration to Unlimited Time Duration contracts.