The Effects of Size and Age on Firm Growth:  Does Foreign Ownership Matter?

Hyo-Yong Sung; Mikyung Yun

doi:10.11644/KIEP.JEAI.2002.6.1.92

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East Asian Economic Review Vol. 6, No. 1, 2002. pp. 113-135.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.2002.6.1.92

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The Effects of Size and Age on Firm Growth: Does Foreign Ownership Matter?

Author
Hyo-Yong Sung	Sungshin Women's University hsung@sungshin.ac.kr
Mikyung Yun	Korea Institute for International Economic Policy (KIEP) mkyun@kiep.go.kr

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

This paper explores the impact of size and age on firm growth in Korean manufacturing industries during the ten years between 1990 and 2000, and compares the result between domestic firms and foreign invested firms. The estimation results suggest that in general, smaller firms grow faster among domestic firms, rejecting Gibrat's law, but that size had no significant effect on growth for foreign invested firms, supporting Gibrat's law. On the other hand younger firms tend to grow faster than older firms for both foreign invested and domestic firms, supporting Jovanovic's learning model of firm growth.

JEL classification: F21, F23

Keywords

Foreign investment, Firm growth, Gibrat's Law

Language

English

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