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The Growth of Business Firms: Facts and Theory

Pammolli, Fabio and Buldyrev, Sergey V. and Growiec, Jakub and Riccaboni, Massimo and Stanley, H. Eugene The Growth of Business Firms: Facts and Theory. Journal of the European Economic Association, 5 (2-3). pp. 574-584. ISSN 1542-4766 (2007)

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We refer to the framework developed by Ijiri and Simon (1977) and to the notion of independent submarkets (Sutton 1998) to provide a simple candidate explanation for the shape of the firm growth distribution based on a model of proportional growth at the level of both the introduction of new products by firms and their size dynamics. We exploit the features of a unique longitudinal data set which covers the entire distribution of products and firms in the worldwide pharmaceutical industry to test the model at different levels of aggregation as well as at different time lags. Econometric investigations show that the model's predictions are in good agreement with empirical evidence. (JEL: L11, L65)

Item Type: Article
Identification Number: 10.1162/jeea.2007.5.2-3.574
Research Area: Economics and Institutional Change
Depositing User: Users 2 not found.
Date Deposited: 30 Jun 2011 14:27
Last Modified: 31 Aug 2011 14:40
URI: http://eprints.imtlucca.it/id/eprint/639

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