A Generalized Preferential Attachment Model for Business Firms Growth Rates: I. Empirical Evidence
AbstractWe introduce a model of proportional growth to explain the distribution $P(g)$ of business firm growth rates. The model predicts that $P(g)$ is Laplace in the central part and depicts an asymptotic power-law behavior in the tails with an exponent $\zeta=3$. Because of data limitations, previous studies in this field have been focusing exclusively on the Laplace shape of the body of the distribution. We test the model at different levels of aggregation in the economy, from products, to firms, to countries, and we find that the its predictions are in good agreement with empirical evidence on both growth distributions and size-variance relationships.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number physics/0609011.
Date of creation: Sep 2006
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- Pammolli, Fabio & Fu, Dongfeng & Buldyrev, Sergey V. & Riccaboni, Massimo & Matia, Kaushik & Yamasaki, Kazuko & Stanley, H. Eugene, 2006. "A Generalized Preferential Attachment Model for Business Firms Growth Rates: I. Empirical Evidence," MPRA Paper 15983, University Library of Munich, Germany.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
- L00 - Industrial Organization - - General - - - General
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
- L - Industrial Organization
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