Theories of firms' growth and the generation of jobs

This paper relates recent empirical research on the growth of U.K. companie s to the main economic theories of firms' growth and to empirical results f or the U.S.A. Smaller and younger firms have been growing more quickly than larger and older firms, thus generating proportionately more new jobs. The se results do not support the various theories of static and dynamic econom ies of scale. Serial correlation of growth is very low, so success does not persist. The systematic tendency for small and younger firms to grow more quickly is the main reason why firm growth is not entirely stochastic.