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The Dynamics of Firm Growth and Survival Under Alternative Forms of Control

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  • Kimya Kamshad

Abstract

The publication of the passive learning model of Jovanovic [Jovanic, B., "Selection and the Evolution of Industry," Econometrica, 1982, 60, 649-670.] initiated a resurgence of interest in firm growth and survival processes. Yet all the recent work has focused on the profit maximizing firm, without considering how robust the results are to alternative forms of control. This paper applies the model to the case of the labour managed firm, a type of firm studied extensively for its divergent behaviour from profit maximising firms. The findings indicate that Jovanovic's key predictions are rendered indeterminate under labour management, although there is evidence to show that the actual empirical relationships continue to hold. In considering possible explanations for the breakdown of the results, we conclude that the Jovanovic model overemphasizes institutional structure to the neglect of more fundamental determinants of growth and survival.midt, Paul Geroski and an anonymous referee for helpful comments and discussions. Any remaining errors are my own.

Suggested Citation

  • Kimya Kamshad, 1996. "The Dynamics of Firm Growth and Survival Under Alternative Forms of Control," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 3(3), pages 331-341.
    • Handle: RePEc:taf:ijecbs:v:3:y:1996:i:3:p:331-341
    DOI: 10.1080/758539570
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    References listed on IDEAS

    as
    1. Estrin, Saul, 1982. "Long-run supply responses under self-management," Journal of Comparative Economics, Elsevier, vol. 6(4), pages 363-378, December.
    2. Ben-ner, Avner, 1984. "On the stability of the cooperative type of organization," Journal of Comparative Economics, Elsevier, vol. 8(3), pages 247-260, September.
    3. Evans, David S, 1987. "The Relationship between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 567-581, June.
    4. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-674, August.
    5. Dreze, Jacques H, 1976. "Some Theory of Labor Management and Participation," Econometrica, Econometric Society, vol. 44(6), pages 1125-1139, November.
    6. Spinnewyn, Frans & Svejnar, Jan, 1990. "Optimal Membership, Employment, and Income Distribution in Unionized and Labor-Managed Firms," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 317-340, July.
    7. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    8. repec:bla:econom:v:51:y:1984:i:23:p:295-305 is not listed on IDEAS
    9. Miyazaki, Hajime, 1984. "On Success and Dissolution of the Labor-Managed Firm in the Capitalist Economy," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 909-931, October.
    10. Kimya M. Kamshad, 1994. "Firm Growth and Survival: Does Ownership Structure Matter?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(3), pages 521-543, September.
    11. Hall, Bronwyn H, 1987. "The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 583-606, June.
    12. Kamshad, Kimya M, 1994. "Firm Growth and Survival: Does Ownership Structure Matter?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(3), pages 521-543, Fall.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Firm growth; Survival; Labour management; Passive learning.; JEL classifications: C61; D21; D73 D9; J54; L2; P13;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • P13 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Cooperative Enterprises

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