A Structural Empirical Model of Firm Growth, Learning, and Survival
AbstractWe present a structural model of firm growth, learning, and survival and consider its identification and estimation. In the model, entrepreneurs have private and possibly error-ridden observations of persistent and transitory shocks to profit. We demonstrate that the model's parameters can be recovered from public observations of sales and survival, and we estimate them using monthly data from new bars in Texas. We find that entrepreneurs observe profit's persistent component without error. In this sense, their information is substantially superior to the public's.
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Date of creation: May 2003
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Other versions of this item:
- Abbring, Jaap H. & Campbell, Jeffrey R., 2003. "A Structural Empirical Model of Firm Growth, Learning, and Survival," IZA Discussion Papers 781, Institute for the Study of Labor (IZA).
- Jaap H. Abbring & Jeffrey R. Campbell, 2003. "A structural empirical model of firm growth, learning, and survival," Working Paper Series WP-03-11, Federal Reserve Bank of Chicago.
- C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
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