Ownership networks, financing and firm growth

This paper extends the literature on firm dynamics by incorporating ownership networks and financing into the analysis of firm growth. Using administrative data covering the universe of privately owned Ecuadorian manufacturing firms from 2006 to 2019, we construct firm-level measures of co-ownership networks and assess their impact on growth outcomes. Employing a quantile fixed-effects dynamic panel regression framework, we identify heterogeneous effects of firm age across the conditional distribution of growth. Both leverage and ownership network variables exhibit statistically significant effects on firm growth, which demonstrates their influence on firm dynamics through channels such as resource access and inter-firm connections. For younger firms, we find no significant relationship between age and growth, which suggests ownership networks and financing conditions are more relevant drivers in a firm’s early years. These findings show inter-firm linkages, particularly ownership networks, capture additional aspects of firm dynamics not explored in previous research.

Social Networks, Volume 86, Pages 334-341