Firm Size Profiles And Regional Volatility: Is There A Connection:

Abstract

In recent years increasing attention has been focused on the role smaller firms play in the economy. This paper examines the relationship between a region’s manufacturing firm size distribution and regional economic volatility. The study findings suggest there is a relationship between the size profile of a region’s manufacturing firms and that region’s sensitivity to changes in the nation economy. It was also found that fewer and fewer firms of a given size were required before a region became economically sensitive to national economic cycles.