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On the mean/variance relationship of the firm size distribution: evidence and some theory

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Author Info
Edoardo Gaffeo ()
Corrado di Guilmi
Mauro Gallegati
Alberto Russo

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Abstract

In this paper we make use of firm-level data for a sample of European countries to prove the existence of a positive linear relationship between the mean and the variance of firms’ size, an empirical regularity known in mathematical biology as the Taylor power law. A computerized experiment is used to show that the estimated slope of the linear relationship can be fruitfully employed to discriminate among alternative theories of firms’ growth.

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Publisher Info
Paper provided by Department of Economics, University of Trento, Italia in its series Department of Economics Working Papers with number 0805.

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Date of creation: 2008
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Handle: RePEc:trn:utwpde:0805

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Related research
Keywords: Taylor power law; Firm size distribution; Stochastic growth;

Find related papers by JEL classification:
L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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This page was last updated on 2009-11-19.

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