ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Manufacturing and Service sectorSubscribe to Manufacturing and Service sector

Firm Transitions in Indian Formal MSMEs

Using a panel of formal manufacturing and service sector firms incorporated during 2000–08, and by following each firm for a period of five years (2007–15) after incubation, we analyse the relationship between firm transition, firm age, and firm size. The results show an inverted U-shaped relationship between firm transition and age consistent with the non-linear relationship between age and performance suggested in the literature. However, our interpretation suggests a different possibility. We also show that the choice of definition of firm size has a distinct impact on the transition patterns and size structures of firms in the manufacturing and service sectors.

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