The size and growth of UK manufacturing and service firms

This paper investigates the relationship between firm size and growth for U K manufacturing and services over the period 1991 to 1995. We test for size effects on growth, using models which incorporate the influences of previo us growth and industry membership. The results from the analysis suggest th at for both manufacturing and services, small firms tend to grow faster tha n larger firms. The growth of manufacturing firms appears to persist over t ime, whereas this is not the case for service firms. Small firms tend to ha ve more variable growth rates than their larger counterparts in manufacturi ng and services. This suggests that large firms may enjoy advantages associ ated with diversified operations which make them less susceptible to period s of extremely high or low growth.