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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by arXiv.org in its series Papers with number physics/0609011.
Date of creation: Sep 2006
Date of revision:
Contact details of provider:
Web page: http://arxiv.org/
Other versions of this item:
- 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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- De Fabritiis, Gianni & Riccaboni, Massimo & Pammolli, Fabio, 2003.
"On Size and Growth of Business Firms,"
15866, University Library of Munich, Germany.
- De Fabritiis, G. & Pammolli, F. & Riccaboni, M., 2003. "On size and growth of business firms," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 38-44.
- Xavier Gabaix, 1999. "Zipf'S Law For Cities: An Explanation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 739-767, August.
- Bottazzi, Giulio & Dosi, Giovanni & Lippi, Marco & Pammolli, Fabio & Riccaboni, Massimo, 2001.
"Innovation and corporate growth in the evolution of the drug industry,"
International Journal of Industrial Organization,
Elsevier, vol. 19(7), pages 1161-1187, July.
- Giulio Bottazzi & Giovanni Dosi & Marco Lippi & Fabio Pammolli & Massimo Riccaboni, 2001. "Innovation and Corporate Growth in the Evolution of the Drug Industry," LEM Papers Series 2001/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
- Canning, D. & Amaral, L. A. N. & Lee, Y. & Meyer, M. & Stanley, H. E., 1998. "Scaling the volatility of GDP growth rates," Economics Letters, Elsevier, vol. 60(3), pages 335-341, September.
- S. V. Buldyrev & L. A. N. Amaral & S. Havlin & H. Leschhorn & P. Maass & M. A. Salinger & H. E. Stanley & M. H. R. Stanley, 1997. "Scaling behavior in economics: II. Modeling of company growth," Papers cond-mat/9702085, arXiv.org.
- Kaushik Matia & Dongfeng Fu & Sergey V. Buldyrev & Fabio Pammolli & Massimo Riccaboni & H. Eugene Stanley, 2005. "Statistical Properties of Business Firms Structure and Growth," Papers physics/0502081, arXiv.org.
- L. A. N. Amaral & S. V. Buldyrev & S. Havlin & H. Leschhorn & P. Maass & M. A. Salinger & H. E. Stanley & M. H. R. Stanley, 1997. "Scaling behavior in economics: I. Empirical results for company growth," Papers cond-mat/9702082, arXiv.org.
- Youngki Lee & Luis A. N. Amaral & David Canning & Martin Meyer & H. Eugene Stanley, 1998. "Universal features in the growth dynamics of complex organizations," Papers cond-mat/9804100, arXiv.org.
- Yuichi Ikeda & Hideaki Aoyama & Hiroshi Iyetomi & Yoshi Fujiwara & Wataru Souma, 2008. "Correlated performance of firms in a transaction network," Journal of Economic Interaction and Coordination, Springer, vol. 3(1), pages 73-80, June.
- Kaldasch, Joachim, 2012.
"Evolutionary Model of the Personal Income Distribution,"
37865, University Library of Munich, Germany.
- Kaldasch, Joachim, 2012. "Evolutionary model of the personal income distribution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(22), pages 5628-5642.
- Joachim Kaldasch, 2012. "Evolutionary Model of the Personal Income Distribution," Papers 1203.6507, arXiv.org.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (arXiv administrators).
If references are entirely missing, you can add them using this form.