### Table 2: Descriptive statistics: Firm size and firm growth in terms of value added in the machine building industries

||**Variable**|**Obs.**|**Mean**|**25thperc.**|**Median**|**75thperc.**|**Std. dev.**|**Min.**|**Max.**|
|---|---|---|---|---|---|---|---|---|---|
|**Full sample**|Value added growth|617|0.128|-0.091|0.140|0.335|0.403|-0.992|2.179|
||Log(value added)|742|9.027|8.152|8.931|9.770|1.292|5.714|13.558|
|**By ownership structure**||||||||||
|Private|Value added growth|<br>68|0.175|-0.020|0.139|0.371|0.507|-0.992|1.954|
||Log(value added)|83|8.598|7.845|8.751|9.447|1.078|5.714|11.095|
|State-owned|Value added growth|279|0.113|-0.092|0.132|0.317|0.378|-0.958|2.179|
||Log(value added)|348|9.090|8.203|8.993|9.785|1.349|5.858|13.558|
|Mixed ownership|Value added growth|270|0.133|-0.094|0.150|0.358|0.398|-0.959|1.646|
||Log(value added)|311|9.072|8.163|8.804|9.949|1.260|6.040|12.953|
|Ministry-reporting|Value added growth|307|0.117|-0.087|0.134|0.317|0.361|-0.959|1.646|
||Log(value added)|372|9.310|8.585|9.190|9.991|1.291|6.116|13.558|
|Non-Ministry-reporting|Value added growth|310|0.139|-0.100|0.141|0.361|0.440|-0.992|2.179|
||Log(value added)|370|8.743|7.903|8.601|9.555|1.230|5.714|12.020|
|**By type of firm**||||||||||
|Head companies|Value added growth|<br>31|0.126|-0.263|0.213|0.347|0.491|-0.867|1.344|
||Log(value added)|38|10.483|7.733|11.208|12.953|2.377|7.006|13.558|
|Affiliates of vertical chains|Value added growth|110|0.106|-0.084|0.149|0.316|0.357|-0.958|<br>0.923|
||Log(value added)|133|9.547|8.961|9.698|10.136|0.780|7.408|11.048|
|Independent firms|Value added growth|476|0.134|-0.089|0.139|0.346|0.407|-0.992|2.179|
||Log(value added)|571|8.809|7.990|8.728|9.514|1.187|5.714|12.218|
|**By subsector**||||||||||
|Electrical|Value added growth|<br>43|0.161|-0.002|0.196|0.352|0.375|-0.992|1.374|
||Log(value added)|50|8.638|7.845|8.747|9.540|1.053|6.597|10.011|
|Interdis. production|Value added growth|<br>48|0.132|-0.016|0.154|0.285|0.308|-0.518|0.878|
||Log(value added)|50|8.957|8.280|8.985|10.077|1.169|6.545|10.443|
|Agricultural machinery|Value added growth|<br>75|0.101|-0.180|0.124|0.331|0.428|-0.959|0.949|
||Log(value added)|87|9.199|7.888|8.491|10.298|1.884|6.040|13.558|
|Automobile|Value added growth|<br>85|0.250|-0.136|0.256|0.505|0.579|-0.817|1.954|
||Log(value added)|100|9.514|8.487|9.910|10.577|1.475|5.714|12.218|
|Instrumentation|Value added growth|<br>49|0.100|-0.072|0.134|0.253|0.298|-0.801|0.929|
||Log(value added)|61|8.964|8.464|9.188|9.584|1.201|6.075|11.361|
|Machine tools|Value added growth|<br>50|0.072|-0.123|0.092|0.275|0.357|-0.958|0.895|
||Log(value added)|61|9.183|8.819|9.174|9.505|0.616|7.059|11.440|
|Repair of machinery|Value added growth|<br>90|0.157|-0.015|0.169|0.368|0.418|-0.858|2.179|
||Log(value added)|94|8.836|8.085|8.736|9.375|0.960|7.113|11.524|

_Notes:_ Statistics by subsector are reported for subsectors where at least 50 observations are available.

# **3. Modeling firm growth dynamics in the machine building industry**

## **3.1 Gibrat's law: Firm size dynamics and convergence trends**

In his seminal contribution, Gibrat (1931) argues that firm growth is independent of firm size and, consequently, firm size follows a random walk. In the empirical firm growth literature this hypothesis is referred to as _Gibrat's law of proportionate growth_ . Formally, this implies that the 7