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 ζ = 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 University Library of Munich, Germany in its series MPRA Paper with number 15983.
Date of creation: 31 Aug 2006
Date of revision:
Publication status: Published in The European Physical Journal B 2.57(2007): pp. 127-130
Gibrat Law; Firm Growth; Size Distribution;
Other versions of this item:
- Fabio Pammolli & Dongfeng Fu & S. V. Buldyrev & Massimo Riccaboni & Kaushik Matia & Kazuko Yamasaki & H. E. Stanley, 2006. "A Generalized Preferential Attachment Model for Business Firms Growth Rates: I. Empirical Evidence," Papers physics/0609011, arXiv.org.
- 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
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
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