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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

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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Bibliographic 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;

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Cited by:
  1. Elisabetta De Antoni, 2009. "Money and finance: the heterodox views of R. Clower, A. Leijonhufvud and H. Minsky," Department of Economics Working Papers 0908, Department of Economics, University of Trento, Italia.

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