The paper investigates whether liquidity constraints affect firm size and growth dynamics using a large longitudinal sample of Italian manufacturing firms. We run standard panel-data Gibrat regressions, suitably expanded to take into account liquidity constraints (proxied by cash flow scaled by firm sales). Moreover, we characterize the statistical properties of firms size, growth, age, and (scaled) cash flow distributions. Pooled data show that: (i) liquidity constraints engender a negative, statistically significant, effect on growth once one controls for size; (ii) smaller firms grow more (and experience more volatile growth patterns) after controlling for liquidity constraints; (iii) the stronger liquidity constraints, the more size negatively affects firm growth. We find that pooled size distributions depart from log-normality and growth rates are well approximated by fat-tailed, tent-shaped (Laplace) densities. We also study the evolution of growth-size distributions over time. Our exercises suggest that the strong negative impact of liquidity constraints on firm growth which was present in the pooled sample becomes ambiguous when one disaggregates across years. Finally, firms who were young and strongly liquidity-constrained at the beginning of the sample period grew persistently more than those who were old and weakly liquidity-constrained.
Previous literature on open source software (OSS) mostly analyzes organizational issues within communities of developers and users. This paper focuses on for-profit organizations that release software products under OSS licenses, and argues that variations in their endowments of intellectual property rights, namely patents and trademarks, help to determine which firms will tend to incorporate OSS into commercial products. We explain whether and under what conditions preexisting stocks of intellectual property rights can be useful complementary assets that allow firms to benefit directly or indirectly from commercializing OSS products, and test our hypotheses on a novel data set built on firms' announcements of OSS product releases in the specialized press between 1995 and 2003. We find three robust results: (a) firms with large stocks of software patents are more likely to release OSS products; (b) firms with large stocks of software trademarks are less likely to release OSS products; (c) firms with large stocks of hardware trademarks are more likely to release OSS products.
We study earnings of individuals who exit entrepreneurship for paid employment. We find mean (median) positive rewards from entrepreneurship in subsequent paid employment relative to matched employees. Rewards are higher for former entrepreneurs hired in highly innovative sectors. We also find that the performance of the exited firm is a strong predictor of the earnings premium for former entrepreneurs when the firm performed well, while we do not find median discounts for entrepreneurs exiting low performing firms. We use registry data that encompass the population of firms and individuals in the Norwegian economy.
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