Size-Distribution,Growth Potential and Job-Generation Contribution of UK Firms,1982-84

Abstract

Dr Johan Doyle is with the department of mangment at bath universiyty, England, and Prof.Colin Gallagher is with the Department of industrial Managment at the university of Newcastle-upon-Tyne, England. this paper examines the life-cycle of united kingdom firms and their job-generation performance, using the vfery large database files of the credit rating and marketing firm Dun and Brandstreet. the data for the year 1982 and 1984 were analysed by computer to extract the figures for birts, deaths, expansions, and contractions in that period. The author needed to derive an estimate of the size-bands,and to estimate the mean number of jobs gained or lost when a firm moves to a different size-bands.They then generalised fro mthe database to the uk population at large, to give a picture of which sizes of firms are expanding or contracting, and hence where jobs are being created or lost. the result gives useful insights into what is happening in the economy in terms of employment. The only size-band which was a net creator of jobs was the smallest (less than 20 employees), and at best the otehr merely held theri own. firms with more than 100 employees lost share.All size-bands were responsible for losses of similar magnitude, due to both deaths and contractions. in sharp contrast, job cretion was heaily biassed toward the smaller firms. it is expansions as well as births which have created the new jobs in the economy and in particular,expanision from the smalller cohorts. it is apparent from the result that small firms in the uk are not expanding in sufficient numbers.

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