We express the idea of classical competition in a statistical equilibrium model, where the tendency for competition to equalize profit rates results in an exponential power (or Subbotin) distribution. The model supports and extends recent evidence on the Laplace distribution of growth rates in firm size. We also find tent-shaped distributions in the size growth rates of Forbes Global 2000 companies, which we interpret as preliminary evidence in favor of the hypothesis that classical competition is a globally operating mechanism. --
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Paper provided by Christian-Albrechts-University of Kiel, Department of Economics in its series Economics Working Papers with number
2008,03.
Find related papers by JEL classification: F01 - International Economics - - General - - - Global Outlook E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General D21 - Microeconomics - - Production and Organizations - - - Firm Behavior L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General C16 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Econometric and Statistical Methods; Specific Distributions
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