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Firms growth dynamics, competition and power-law scaling

Author

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  • Gupta, Hari M.
  • Campanha, José R.

Abstract

We study the growth dynamics of the size of manufacturing firms considering competition and normal distribution of competency. We start with the fact that all components of the system struggle with each other for growth as happened in real competitive business world. The detailed quantitative agreement of the theory with empirical results of firms growth based on a large economic database spanning over 20 years is good with a single set of the parameters for all the curves. Further, the empirical data of the variation of the standard deviation of the growth rate with the size of the firm are in accordance with the present theory rather than a simple power law.

Suggested Citation

  • Gupta, Hari M. & Campanha, José R., 2003. "Firms growth dynamics, competition and power-law scaling," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 323(C), pages 626-634.
    • Handle: RePEc:eee:phsmap:v:323:y:2003:i:c:p:626-634
    DOI: 10.1016/S0378-4371(03)00017-7
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    Cited by:

    1. Hernan Mondani & Petter Holme & Fredrik Liljeros, 2014. "Fat-Tailed Fluctuations in the Size of Organizations: The Role of Social Influence," PLOS ONE, Public Library of Science, vol. 9(7), pages 1-9, July.

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