chapter  3
24 Pages

Firm size distribution and returns to scale: non- parametric frontier estimates from Italian manufacturing


These industries have been chosen through two different steps. First, as shown in Table 3.1 we have found 11 industries with at least 200 firms each year to get reliable non-parametric estimates (see Section 3.3 for details). Second, we selected six out of these 11 industries according to their shares of the total manufacturing industry value added. Industries DA15, DB17, DG24, DI26 and DK29 are on top of the value-added ranking over the whole period. The three industries which occupy alternatively the sixth place are DJ27, DJ28 and DL31. We retain DJ28 because it contains almost three times as many firms as the other two industries. Finally, in order to classify firms in different size ranges we follow the 2003 European Commission Recommendation (2003/361/EC). Among the available size proxies, we consider Total Assets because of the stability of this variable through time.