eprintid: 687
rev_number: 12
eprint_status: archive
userid: 2
dir: disk0/00/00/06/87
datestamp: 2011-07-01 10:40:04
lastmod: 2011-08-31 14:40:39
status_changed: 2011-07-01 10:40:04
type: article
metadata_visibility: show
item_issues_count: 0
creators_name: Pammolli, Fabio
creators_name: Fabritiis, G. De
creators_name: Riccaboni, Massimo
creators_id: f.pammolli@imtlucca.it
creators_id: 
creators_id: massimo.riccaboni@imtlucca.it
title: On size and growth of business firms
ispublished: pub
subjects: HB
subjects: HD
subjects: QC
divisions: EIC
full_text_status: none
keywords: Firm growth; Power laws; Gibrat's law; Economic growth; Pharmaceutical industry
note: Proceedings of the International Econophysics Conference.
PACS classification codes: 02.50.Ey; 01.75.+m; 05.40.−a
abstract:  We study size and growth distributions of products and business firms in the context of a given industry. Firm size growth is analyzed in terms of two basic mechanisms, i.e., the increase of the number of new elementary business units and their size growth. We find a power-law relationship between size and the variance of growth rates for both firms and products, with an exponent between -0.17 and -0.15, with a remarkable stability upon aggregation. We then introduce a simple and general model of proportional growth for both the number of firm independent constituent units and their size, which conveys a good representation of the empirical evidences. This general and plausible generative process can account for the observed scaling in a wide variety of economic and industrial systems. Our findings contribute to shed light on the mechanisms that sustain economic growth in terms of the relationships between the size of economic entities and the number and size distribution of their elementary components.
date: 2003
date_type: published
publication: Physica A: Statistical Mechanics and its Applications
volume: 324
number: 1-2
publisher: Elsevier
pagerange: 38 - 44
id_number: 10.1016/S0378-4371(03)00043-8
refereed: TRUE
issn: 0378-4371
official_url: http://www.sciencedirect.com/science/article/pii/S0378437103000438
citation:   Pammolli, Fabio and Fabritiis, G. De and Riccaboni, Massimo  On size and growth of business firms.  Physica A: Statistical Mechanics and its Applications, 324 (1-2).  38 - 44.  ISSN 0378-4371      (2003)