Dispersion and Heterogeneity of Firm Performances in Nine French Service Industries, 1984-1987
NBER Working Paper No. 3665
In the present study, we have taken advantage of the wealth of information provided by the French annual survey of market services to construct a panel sample of data on about 2300 large firms, from 1984 to 1987, in nine selected service industries (at the four digit level of the industrial classification) . We have contrasted the average performances of firms across industries, in terms of labor productivity ratios and profitability margins, both in levels and in growth rates. We have compared these averages indicators for more or less inclusive sample definitions, going from the survey of all firms to a 'balanced' and "cleaned' panel data sample of large firms, and for the two kinds of averages usually considered in macro and micro-analyses. We, then proceeded to show that the differences across industries in average productivity and profitability are usually small when compared to the range of individual differences within industries, and have investigated to what extent the extreme variability in individual performances could be accounted for by other heterogeneity factors, besides the industry effects.