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The Nonlinear Relationship Between Firm Size and Growth in the Automotive Industry

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  • Claudiu Tiberiu Albulescu

    (Politehnica University of Timisoara
    University of Poitiers)

  • Matei Tămășilă

    (Politehnica University of Timisoara)

  • Ilie Mihai Tăucean

    (Politehnica University of Timisoara)

Abstract

The automotive industry dominates the economy of the west part of Romania, making necessary the identification of firm growth drivers. Accordingly, the purpose of this paper is to analyse the nonlinear impact of firm size in influencing firm growth. To do so, we use a panel quantile regression with fixed effects for a set of 19 automotive companies over the period 2007–2015, while controlling for the role of research and development activities and firm’s financial performances. We show that firm size positively sustains firm growth at all quantiles, whereas this relationship is stronger for companies that grow less fast. Our findings are robust to the computation of firm growth and size based on different indicators and are not influenced by the agglomeration effect.

Suggested Citation

  • Claudiu Tiberiu Albulescu & Matei Tămășilă & Ilie Mihai Tăucean, 2021. "The Nonlinear Relationship Between Firm Size and Growth in the Automotive Industry," Journal of Industry, Competition and Trade, Springer, vol. 21(3), pages 445-463, September.
    • Handle: RePEc:kap:jincot:v:21:y:2021:i:3:d:10.1007_s10842-021-00364-6
    DOI: 10.1007/s10842-021-00364-6
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    More about this item

    Keywords

    Firm growth; Firm size; Panel quantile regression; Nonlinear effect; Gibrat’s law; Automotive industry;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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