Elsevier

European Economic Review

Volume 40, Issue 6, June 1996, Pages 1305-1323
European Economic Review

Firm start-up size: a conditional quantile approach

https://doi.org/10.1016/0014-2921(95)00034-8Get rights and content

Abstract

Using data on the individual firms created in Portugal, we evaluate the importance of industry attributes for the distribution of firm start-up size. By estimating conditional quantile functions we take ‘snap-shots’ of the conditional distribution of new firms' dimension at different quantiles. This approach provides answers that usual methods do not, namely, how different entry is at ‘small’ and ‘large’ scales. We find that industry attributes, such as scale economies and turbulence, are more important for the largest entrants.

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      On the contrary, the quantile regression adopting the conditional median estimation is robust to departure from normality (Mata & Machado, 1996; Fattouh et al., 2005). For further details on this issue, see Mata and Machado (1996) and Fattouh et al. (2005), among others. Fig. 1 shows the plots of the pairwise (Z-Fisher transformed) realized correlations.

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