ABSTRACT
The effect of plant size on fertility in terms of new business formation is not of academic interest only. The absolute size of plants has been increasing in the UK over a fairly long period (Prais [9, pp. 51-4]) and it would be useful to know whether this trend is likely to have any effect on the rate of new firm formation. This rate is of industrial significance since there is a good deal of evidence – based largely on case studies – to suggest that new firms have often played an important part in introducing innovations and stimulating competition; see for example Freeman [4, p. 14].3
