On the mean/variance relationship of the firm size distribution: evidence and some theory
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.
|Date of creation:||2008|
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