eprintid: 637
rev_number: 17
eprint_status: archive
userid: 2
dir: disk0/00/00/06/37
datestamp: 2011-06-30 14:27:17
lastmod: 2013-10-10 08:37:45
status_changed: 2011-06-30 14:27:17
type: article
metadata_visibility: show
item_issues_count: 0
creators_name: Pammolli, Fabio
creators_name: Riccaboni, Massimo
creators_name: Buldyrev, Sergey V.
creators_name: Ponta, Linda
creators_name: Stanley, H. Eugene
creators_id: f.pammolli@imtlucca.it
creators_id: massimo.riccaboni@imtlucca.it
creators_id: 
creators_id: 
creators_id: 
title: The size variance relationship of business firm growth rates
ispublished: pub
subjects: HB
subjects: HD
subjects: QC
divisions: EIC
full_text_status: public
keywords:     preferential attachment;
    pharmaceutical industry;
    distributions

note: © 2008 by The National Academy of Sciences of the USA
abstract: The relationship between the size and the variance of firm growth rates is known to follow an approximate power-law behavior σ(S) ≈ S−β(S) where S is the firm size and β(S) ≈ 0.2 is an exponent that weakly depends on S. Here, we show how a model of proportional growth, which treats firms as classes composed of various numbers of units of variable size, can explain this size-variance dependence. In general, the model predicts that β(S) must exhibit a crossover from β(0) = 0 to β(∞) = 1/2. For a realistic set of parameters, β(S) is approximately constant and can vary from 0.14 to 0.2 depending on the average number of units in the firm. We test the model with a unique industry-specific database in which firm sales are given in terms of the sum of the sales of all their products. We find that the model is consistent with the empirically observed size-variance relationship. 
date: 2008
date_type: published
publication: Proceedings of the National Academy of Sciences
volume: 105
number: 50
publisher: National Academy of Sciences
pagerange: 19595-19600
id_number: 10.1073/pnas.0810478105
refereed: TRUE
issn: 1091-6490
official_url: http://www.pnas.org/content/105/50/19595.full.pdf+html
related_url_url: http://www.pnas.org/cgi/content/full/0810478105/DCSupplemental.
related_url_type: pub
citation:   Pammolli, Fabio and Riccaboni, Massimo and Buldyrev, Sergey V. and Ponta, Linda and Stanley, H. Eugene  The size variance relationship of business firm growth rates.  Proceedings of the National Academy of Sciences, 105 (50).  pp. 19595-19600.  ISSN 1091-6490      (2008)  
document_url: http://eprints.imtlucca.it/637/1/size_variance_pnas_2008a.pdf