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Is Firm Productivity Related to Size and Age? The Case of Large Australian Firms

Author

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  • Alfons Palangkaraya

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Jongsay Yong

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Andreas Stierwald

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

We investigate the relationship between productivity, size and age of large Australian firms employing more than 100 employees or holding assets in excess of $100 million. In addition, we also investigate the extent of productivity persistence among these firms by looking at transition matrices of productivity distribution and productivity-rank mobility. The empirical study is based on the IBISWorld database used to estimate translog cost function to measure (a residual based) productivity. We find evidence, though somewhat weak, that larger and older firms are on average less productive. Furthermore, we find stronger evidence for a high degree of inertia in terms of productivity ranking within an industry.

Suggested Citation

  • Alfons Palangkaraya & Jongsay Yong & Andreas Stierwald, 2006. "Is Firm Productivity Related to Size and Age? The Case of Large Australian Firms," Melbourne Institute Working Paper Series wp2006n07, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2006n07
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    References listed on IDEAS

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    Cited by:

    1. Chen, Minjia & Guariglia, Alessandra, 2013. "Internal financial constraints and firm productivity in China: Do liquidity and export behavior make a difference?," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1123-1140.
    2. Huang, Youxing & Zhang, Yan, 2017. "How does outward foreign direct investment enhance firm productivity? A heterogeneous empirical analysis from Chinese manufacturing," China Economic Review, Elsevier, vol. 44(C), pages 1-15.
    3. Minjia Chen & Alessandra Guariglia, 2011. "Financial constraints and firm productivity in China: do liquidity and export behavior make a difference?," Discussion Papers 11/09, University of Nottingham, GEP.
    4. Russell Thomson & Elizabeth Webster, 2013. "Innovation and Productivity," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(4), pages 483-488, December.
    5. Sasan Bakhtiari, 2020. "Do manufacturing entrepreneurs in Australia have (or develop) a productivity advantage?," Journal of Productivity Analysis, Springer, vol. 53(3), pages 321-338, June.
    6. Alfons Palangkaraya & Thomas Spurling & Elizabeth Webster, 2015. "Does Innovation Make (SME) Firms More Productive?," RBA Annual Conference Volume (Discontinued), in: Angus Moore & John Simon (ed.),Small Business Conditions and Finance, Reserve Bank of Australia.
    7. Annalisa Ferrando & Alessandro Ruggieri, 2018. "Financial constraints and productivity: Evidence from euro area companies," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 23(3), pages 257-282, July.
    8. Xiaolei Yang & Shuiying Zhong, 2022. "The Combined Effect of Environmental Policies on China’s Renewable Energy Development: A Multi-Perspective Study Based on Semiparametric Regression Model," IJERPH, MDPI, vol. 20(1), pages 1-15, December.
    9. Mohamud Jama Ali & Elegwa Mukulu & John M. Kihoro & Joyce D. Nzulwa, 2016. "Moderating Effect of Firm Size on the Relationship between Functional Integration and Firm Performance," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(9), pages 38-57, September.
    10. Elizabeth Webster, 2017. "The source of wealth," New Zealand Economic Papers, Taylor & Francis Journals, vol. 51(1), pages 79-85, January.

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    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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