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Does classical competition explain the statistical features of firm growth?

  • Alfarano, Simone
  • Milakovic, Mishael

We propose 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 firm growth rates.

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File URL: http://www.sciencedirect.com/science/article/B6V84-4THC199-1/2/1bf0b08138fb1fe50e72e455d33c1daf
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 101 (2008)
Issue (Month): 3 (December)
Pages: 272-274

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Handle: RePEc:eee:ecolet:v:101:y:2008:i:3:p:272-274
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Giulio Bottazzi & Angelo Secchi, 2005. "Explaining the Distribution of Firms Growth Rates," LEM Papers Series 2005/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  2. Mishael Milakovic & Carolina Castaldi, 2004. "Turnover Activity in Wealth Portfolios," Computing in Economics and Finance 2004 120, Society for Computational Economics.
  3. F. Pammolli & D. Fu & S. V. Buldyrev & M. Riccaboni & K. Matia & K. Yamasaki & H. E. Stanley, 2007. "A generalized preferential attachment model for business firms growth rates," The European Physical Journal B - Condensed Matter and Complex Systems, Springer, vol. 57(2), pages 127-130, 05.
  4. Gatti, Domenico Delli & Guilmi, Corrado Di & Gaffeo, Edoardo & Giulioni, Gianfranco & Gallegati, Mauro & Palestrini, Antonio, 2005. "A new approach to business fluctuations: heterogeneous interacting agents, scaling laws and financial fragility," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 489-512, April.
  5. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
  6. Giulio Bottazzi & Giovanni Dosi & Marco Lippi & Fabio Pammolli & Massimo Riccaboni, 2001. "Innovation and Corporate Growth in the Evolution of the Drug Industry," LEM Papers Series 2001/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  7. repec:rje:randje:v:37:y:2006:2:p:235-256 is not listed on IDEAS
  8. Bottazzi, Giulio & Secchi, Angelo, 2003. "Why are distributions of firm growth rates tent-shaped?," Economics Letters, Elsevier, vol. 80(3), pages 415-420, September.
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