The Macroeconomic Environment and the Size Pattern of Business Firms

Empirical evidence shows that the second half of the 20th century has been characterised by a dramatic change in the evolutionary pattern of firms' size structure: the general tendency towards a growing importance of big business which marked the first phase of post-war development came to a halt in the early '70s, making way to a gradual decrease of the average size of firms and an employment shift towards smaller sized units. This paper argues that such a phenomenon is closely related to the major changes which have affected the macroeconomic environment over the same period, bringing to an end the so-called Golden Age. Particular emphasis is given to the role played, in this connection, by both the increase in the strength of global competition and structurally higher market uncertainty.