Empirical Analysis I: Employment Shares and Absolute Employment Growth at the Size Level for Firms and Establishments: Six Industrial Countries in Two Different Phases of Industrial Development

  • Fabrizio Traù


3.1.1 By the end of the 1970s an increasing number of symptoms was drawing attention, in many developed countries, to the emergence of a new role for smaller firms in the production process, producing an apparent increase in their output share; it was claimed that this trend was paralleled by a corresponding decrease of the economic weight — in relative terms — of larger firms. In the early years of the following decade these signals led to some reflections about the potential role of smallscale production in the perspective of industrial development. Since the very beginning, the phenomenon was viewed in the light of its (potentially) being at the root of a broader change in production activities, grounded — via vertical dis-integration — in a gradual increase in the share of transactions among firms of different sizes, as well as the growing importance of economies of specialization as opposed to economies of large-scale production. The main question to be addressed in this context was to what extent the “new” phenomenon could be considered to reflect a permanent structural break in the organization of productive activities, to be destined to persist over time — more broadly, to represent a “historical alternative” to mass production.1


Small Business Small Firm Large Firm Size Structure Size Pattern 
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Copyright information

© Fabrizio Traù 2003

Authors and Affiliations

  • Fabrizio Traù
    • 1
    • 2
  1. 1.Research Department of the Confederation of Italian IndustriesRomeItaly
  2. 2.Research Associate at the ECRC Centre for Business ResearchUniversity of CambridgeUK

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