No Access

Firm growth in the Swedish energy sector: Will large firms become even more dominant?

Zuzana Macuchova

Dalarna University, SE-791 88 Falun, Sweden

Search for more papers by this author

Niklas Rudholm

HUI Research, SE-103 29 Stockholm, Sweden

Dalarna University, SE-791 88 Falun, Sweden

Search for more papers by this author

, and

Aili Tang

Dalarna University, SE-791 88 Falun, Sweden

Search for more papers by this author

https://doi.org/10.1142/S2335680414500173Cited by:0 (Source: Crossref)

Abstract

This paper examines the determinants of firm growth in the Swedish energy sector using a sample of 200 energy firms active from 2000 to 2010. The article has two aims. First, we seek to investigate whether there is reason to believe that the Swedish energy market will become more concentrated in the future, dominated by a few firms. That would be the result if, for example, large firms systematically and over time grew faster than the smaller firms in the Swedish market. Second, we investigate whether firm growth can mainly be explained by firm-specific variables, supporting Penrose's [1] suggestion that internal resources are the key determinants of firm growth rates. To this end, quantile regression is used in addition to ordinary least squares regression, to provide a more complete estimation of the growth distribution of firms conditional on different attributes. The results indicate that large firms do not grow faster than other firms in the sector, and that energy firms' internal resources are indeed the key determinants of firm growth in the Swedish energy industry.

Keywords:

References

E. T. Penrose , The Theory of the Growth of the Firm ( John Wiley , New York , 1959 ) . Google Scholar
R. Gibrat , Les inégalités économiques ( Librairie du Receuil Sirey , Paris , 1931 ) . Google Scholar
Tang, A. (2014). Does Gibrat's Law Hold for Swedish Energy Firms? Empirical Economics, DOI:10.1007/s00181-014-0883-x . Google Scholar
F. Fizaine , Revue d'économie politique 78 , 606 ( 1968 ) . Google Scholar
T. Dunne, M. Roberts and L. Samuelson, Quarterly Journal of Economics 104(4), 671 (1989). Crossref, Google Scholar
Haltiwanger, J., Jarmin, R. and Miranda, J. (2010). Who Creates Jobs? Small vs. Large vs. Young. NBER Working Paper No. 16300. National Bureau of Economic Research, Cambridge, MA . Google Scholar
Geroski, P. A. and Gugler, K. (2004). Corporate growth convergence in Europe. Oxford Economic Papers, 56 (4), 597–620 . Google Scholar
D. Harhoff, K. Stahl and M. Woywode, Journal of Industrial Economics 46(4), 453 (1998). Crossref, Google Scholar
D. J. Storey , Understanding the Small Business Sector ( International Thomson Business Press , London , 1994 ) . Google Scholar
L. Sleuwaegen and M. Goedhuys, Journal of Development Economics 68(1), 117 (2002). Crossref, Google Scholar
D. B. Audretsch, International Journal of Industrial Organization 13(4), 441 (1995). Crossref, Google Scholar
T. M. Gabe and D. S. Kraybill, Journal of Regional Science 42(4), 703 (2002). Crossref, Google Scholar
C. Higson, S. Holly and P. Kattuman, Journal of Economic Dynamics and Control 26(10), 1539 (2002). Crossref, Google Scholar
C. Higsonet al., Economica 71(282), 299 (2004). Crossref, Google Scholar
S. J. Davis et al. , NBER Macroeconomics Annual 2006 21 , 107 ( 2006 ) . Crossref, Google Scholar
P. A. Geroski , Competence, Governance, and Entrepreneurship , eds. N. Foss and V. Mahnke ( Oxford University Press , Oxford , 2000 ) . Google Scholar
H. A. Simon and C. P. Bonini, American Economic Review 48(4), 607 (1958). Google Scholar
D. S. Evans, Journal of Political Economy 95(4), 657 (1987). Crossref, Google Scholar
D. S. Evans, Journal of Industrial Economics 35(4), 567 (1987). Crossref, Google Scholar
J. Mata, Small Business Economics 6(1), 27 (1994). Crossref, Google Scholar
J. C. Farinas and L. Moreno, Review of Industrial Organization 17(3), 249 (2000). Crossref, Google Scholar
G. Bottazziet al., Applied Economics 43(1), 103 (2011). Crossref, Google Scholar
E. Mansfield, American Economic Review 52(5), 1023 (1962). Google Scholar
F. R. Fitzroy and K. Kraft , Innovation and Technological Change: An International Comparison , eds. Z. J. Acs and D. B. Audretsch ( University of Michigan Press , Ann Arbor, MI , 1991 ) . Google Scholar
G. De Fabritiis, F. Pammolli and M. Riccaboni, Physica A: Statistical Mechanics and its Applications 324(2), 38 (2003). Crossref, Google Scholar
S.-O. Daunfeldt, N. Elert and Å. Lang, Journal of Retailing and Consumer Services 19(5), 464 (2012). Crossref, Google Scholar
S. Das, International Journal of Industrial Organization 13(1), 111 (1995). Crossref, Google Scholar
J. Lundgren , Market Liberalization and Market Integration: Essays on the Nordic Electricity Market , Umeå Economic Studies No. 852. Umeå University ( Department of Economics , Umeå, Sweden , 2013 ) . Google Scholar
L. Bergman et al. , Den nya elmarknaden ( SNS Förlag , Stockholm , 1994 ) . Google Scholar
Hjalmarsson, E. (2000). Nord Pool: A power market without market power. Discussion Paper No. 28, Göteborg University . Google Scholar
Vassilopoulos, P. (2003). Models for the identification of market power in wholesale electricity markets. Discussion Paper, University of Paris-Dauphine . Google Scholar
E. S. Amundsen and L. Bergman, Utilities Policy 14(3), 148 (2006). Crossref, Google Scholar
S.-O. Fridolfsson and T. P. Tangerås, Energy Policy 37(9), 3681 (2009). Crossref, Google Scholar
M. Bask, J. Lundgren and N. Rudholm, Applied Economics 43(9), 1035 (2011). Crossref, Google Scholar
Brännlund, R. and Söderholm, P. (2012). Elmarknaden och elprisets utveckling före och efter avregleringen: Ekonometriska analyser. CERE Working Paper 2012:14. Center for Environmental and Resource Economics, Umeå, Sweden . Google Scholar
Nylund, H. (2013). Electricity Across Borders: Regional Cost Sharing of Grid Investments, International Benchmarking and the Electricity Demand of an Ageing Population. Doctoral thesis. Luleå University of Technology, Luleå, Sweden . Google Scholar
A. D. Chandler Jr. , Strategy and Structure: Chapters in the History of the American Industrial Enterprise ( MIT Press , Cambridge, MA , 1962 ) . Google Scholar
S.-O. Daunfeldtet al., The Service Industries Journal 33(12), 1193 (2013). Crossref, Google Scholar
B. Wernerfelt, Strategic Management Journal 5(2), 171 (1984). Crossref, Google Scholar
B. Jovanovic, Econometrica 50(3), 649 (1982). Crossref, Google Scholar
R. Ericson and A. Pakes, Review of Economic Studies 62(1), 53 (1995). Crossref, Google Scholar
A. Pakes and R. Ericson, Journal of Economic Theory 79(1), 1 (1998). Crossref, Google Scholar
M. Goedhuys and L. Sleuwaegen, Small Business Economics 34(1), 31 (2010). Crossref, Google Scholar
J. D. Angrist and J.-S. Pischke , Mostly Harmless Econometrics: An Empiricist's Companion ( Princeton University Press , Princeton , 2009 ) . Crossref, Google Scholar
H. Strotman, Small Business Economics 28(1), 87 (2007). Crossref, Google Scholar
J. Håkansson, Z. Machucova and N. Rudholm, International Review of Retail, Distribution and Consumer Research 23(1), 48 (2013). Crossref, Google Scholar
D. B. Audretsch, Y. M. Prince and A. R. Thurik, Atlantic Economic Journal 27(2), 201 (1999). Crossref, Google Scholar
J. L. Calvo, Small Business Economics 26(2), 117 (2006). Crossref, Google Scholar
T. Dunne, M. Roberts and L. Samuelson, Quarterly Journal of Economics 104(4), 671 (1989). Crossref, Google Scholar
P. Dunne and A. Hughes, Journal of Industrial Economics 42(2), 115 (1994). Crossref, Google Scholar