IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Scaling behavior in economics: I. Empirical results for company growth

Listed author(s):
  • L. A. N. Amaral
  • S. V. Buldyrev
  • S. Havlin
  • H. Leschhorn
  • P. Maass
  • M. A. Salinger
  • H. E. Stanley
  • M. H. R. Stanley

We address the question of the growth of firm size. To this end, we analyze the Compustat data base comprising all publicly-traded United States manufacturing firms within the years 1974-1993. We find that the distribution of firm sizes remains stable for the 20 years we study, i.e., the mean value and standard deviation remain approximately constant. We study the distribution of sizes of the ``new'' companies in each year and find it to be well approximated by a log-normal. We find (i) the distribution of the logarithm of the growth rates, for a fixed growth period of one year, and for companies with approximately the same size $S$ displays an exponential form, and (ii) the fluctuations in the growth rates -- measured by the width of this distribution $\sigma_1$ -- scale as a power law with $S$, $\sigma_1\sim S^{-\beta}$. We find that the exponent $\beta$ takes the same value, within the error bars, for several measures of the size of a company. In particular, we obtain: $\beta=0.20\pm0.03$ for sales, $\beta=0.18\pm0.03$ for number of employees, $\beta=0.18\pm0.03$ for assets, $\beta=0.18\pm0.03$ for cost of goods sold, and $\beta=0.20\pm0.03$ for property, plant, & equipment.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Latest version
Download Restriction: no

Paper provided by in its series Papers with number cond-mat/9702082.

in new window

Date of creation: Feb 1997
Handle: RePEc:arx:papers:cond-mat/9702082
Contact details of provider: Web page:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:arx:papers:cond-mat/9702082. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (arXiv administrators)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.