Sources of variation in growth rate distribution: evidence from Korean, Japanese, and Chinese manufacturing firms

Abstract

ABSTRACT This study provides a detailed analysis of the growth rate distribution of firms and examines sources of variation in distributional properties. Exploring a large sample of manufacturing firms in Korea, Japan, and China over the period 2010–2017, this study observes heterogeneous properties in the growth rate distribution of groups of firms belonging to the same country, sector, year, and firm size class. Country effects are a major source of variation in distributional properties, particularly determining the growth rate variance and left width of the distribution. The central tendency and tail behaviour of the distribution mainly change over time. Size effects explain the right width of the distribution. However, inter-sectoral distributions do not differ significantly in terms of their distributional properties. This study contributes to understanding underlying growth dynamics of groups of firms, determined by a combination of various factors at different levels, and provides policy implications.