Structural Macroeconomic Change and the Size Pattern of Manufacturing Firms

The crisis of the so-called Golden Age regime has been paralleled since the late '60s of the twentieth century by and increasing importance of market exchanges as opposed to vertically integrated manufacturing activity, leading to major changes in the size structure of firms. These changes have generally taken the form of an employment shift towards low-scale firms, lower average size and higher number of manufacturing units. This book tries to explain on theoretical grounds the reasons for such important discontinuity. "This book is the outcome of some years of reflection about the changes in the organisation of industrial activities experienced by developed countries in the final decades of the past century. Its main focus is on the economic relationship between the crisis of the 'Golden Age' regime and the reversal of the trend towards increasing business concentration it contributed to foster over the first phase of postwar industrial development. From this point of view, it may be considered as an attempt to set the now commonly emphasized revival of 'small scale production' within the wider framework of 'institutional' change. In particular, the book provides a theoretical analysis of firm behaviour appropriate to explain why, in the face of the above mentioned macroeconomic changes, firms did actually choose to opt for increasing market exchanges as opposed to vertically integrated manufacturing activities."--Jacket. This book is the outcome of some years of reflection about the changes in the organization of industrial activities experienced by developed countries in the last decades of the past century. Its main focus is on the economic relationship between the crisis of the "Golden Age" regime and the reversal of the trend towards increasing business concentration it contributed to foster over the first phase of post-war industrial development. From this point of view, it may be considered as an attempt to set the now commonly emphasized revival of "small scale production" within the wider framework of "institutional" change. In particular, the book tries to provide a theoretical analysis of firm behaviour appropriate to explain why, in the face of the above mentioned macroeconomic changes, firms did actually choose to opt for increasing market exchanges as opposed to vertically integrated manufacturing activities Front Matter....Pages i-xv Introduction....Pages 1-6 The Macroeconomic Context in Historical Perspective: Exogenous and Endogenous Changes in Firms’ ‘Competitive Environment’....Pages 7-28 A Theoretical Framework....Pages 29-50 Empirical Analysis I: Employment Shares and Absolute Employment Growth at the Size Level for Firms and Establishments: Six Industrial Countries in Two Different Phases of Industrial Development....Pages 51-77 Empirical Analysis II: The Number of Business Units and their Average Size over the Long Run: Models of Industrial Development....Pages 78-101 Firms versus Plants: a Closer Examination of their Different Behaviour in the Face of Structural Change....Pages 102-118 Concluding Remarks....Pages 119-127 Back Matter....Pages 154-187 The crisis of the so-called Golden Age regime has been paralleled since the late 1960s by an increasing importance of market exchanges as opposed to vertically integrated manufacturing activity, leading to major changes in the size structure of firms. These changes have generally taken the form of an employment shift towards low-scale firms, lower average size and a higher number of manufacturing units. This book tries to explain on theoretical grounds the reasons for such important discontinuity. 1.1.1 Towards the end of the 1960s, J.K. Galbraith began his analysis of the working of the "New Industrial State" with the blunt remark that "the part of the economy...of which the most conspicuous manifestation is the modern big corporation...is the part...we identify with the modern industrial society...To understand the rest of the economy...is to understand every little" (Galbraith 1967, p.9).