This thesis comprises three essays that analyze financial and non-financial aspects of
firm and industry dynamics.
The first essay investigates the evolution of a cohort of entrants during their first ten
years of life. The study looks at the distributions of sales, assets, employment and debtasset
ratio for these firms over time and compares how these distributions change relative
to distributions for incumbent firms. Entrants are smaller in terms of employees, assets
and sales, but have a higher debt-asset ratio when compared with incumbents. These
differences lessen over time because entrants have higher growth rates and smaller
entrant firms have higher failure rates than compared to larger entrants.
The second essay investigates whether long-term growth of a firm is independent of
initial financial structure. I look at a panel of Canadian retail and manufacturing firms
born in 1985. The analysis involves a two-part testing process. The first part tests whether
firm growth exhibits initial size dependence. The growth process for retail firms exhibits
initial size dependence, while the growth process for manufacturing firms does not. The
second part looks at whether growth of ten-year old manufacturing firms is independent
of initial debt-asset ratio. The result rejects independence with the finding that age ten
conditional size of a manufacturing firm has a non-monotonic relationship with initial
debt-asset ratio.
The final essay examines whether Gibrat's law holds for groups of Canadian firms
operating in manufacturing and retail sectors. Gibrat's law holds when firm growth and
variability of growth are independent of firm size and firm growth is independent across
time. Firm growth and variability of growth depend on size for each set of firms, which
leads to violations of Gibrat's law. The source of these two violations is not survival bias,
since the violations occur with the inclusion or exclusion of failing firms. A further
violation is that negative growth persistence exists. Finally, I look at possible failure
because of age effects. I examine a group of new firms with a common age and find the
violations continue to occur for this group. / Arts, Faculty of / Vancouver School of Economics / Graduate
| Identifer | oai:union.ndltd.org:UBC/oai:circle.library.ubc.ca:2429/15845 |
| Date | 11 1900 |
| Creators | Petrunia, Robert John |
| Source Sets | University of British Columbia |
| Language | English |
| Detected Language | English |
| Type | Text, Thesis/Dissertation |
| Format | 5131475 bytes, application/pdf |
| Rights | For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use. |
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