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Big Data and Firm Dynamics

Author

Listed:
  • Maryam Farboodi
  • Roxana Mihet
  • Thomas Philippon
  • Laura Veldkamp

Abstract

We study a model where firms accumulate data as a valuable intangible asset. Data accumulation affects firms' dynamics. It increases the skewness of the firm size distribution as large firms generate more data and invest more in active experimentation. On the other hand, small data-savvy firms can overtake more traditional incumbents, provided they can finance their initial money-losing growth. Our model can be used to estimate the market and social value of data.

Suggested Citation

  • Maryam Farboodi & Roxana Mihet & Thomas Philippon & Laura Veldkamp, 2019. "Big Data and Firm Dynamics," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 38-42, May.
    • Handle: RePEc:aea:apandp:v:109:y:2019:p:38-42
    Note: DOI: 10.1257/pandp.20191001
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    References listed on IDEAS

    as
    1. Charles I. Jones & Christopher Tonetti, 2020. "Nonrivalry and the Economics of Data," American Economic Review, American Economic Association, vol. 110(9), pages 2819-2858, September.
    2. Lesley Chiou & Catherine Tucker, 2017. "Search Engines and Data Retention: Implications for Privacy and Antitrust," NBER Working Papers 23815, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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