Testing for Conditional Convergence in Variance and Skewness: The Firm Size Distribution Revisited

• Autores: Peter Huber, Michael Pfaffermayr
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 72, Nº. 5, 2010, págs. 648-668
• Idioma: inglés
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• Resumen

  • This article derives generalized method of moment-based Wald tests for conditional convergence in terms of the second and third central moments (conditional σ- and ζ-convergence). Monte Carlo simulations indicate that the proposed tests are properly sized and equipped with enough power for sample sizes in excess of 1,000 observations. We apply the Wald tests to a comprehensive sample of Austrian firms. The estimation results indicate a substantial reduction in both the second and third central moments of log firm size over time for the younger age cohorts. For older ones, the log-normal distribution is a valid description of their size distribution.