1,721,141 research outputs found
A comment on the relationship between firms' size and growth rate
Full text linkSince the seminal work of Pareto, many empirical analyses suggested that the distribution of firms size is characterized by an asymptotic power like behavior. At the same time, recent investigations show that the distribution of annual growth rates of business firms displays a remarkable double-exponential shape. A recent letter propose a possible connection between these two empirical regularities. By assuming a bivariate Marshall-Olkin power-like distribution for the size of firms in subsequent time steps, and performing a qualitative asymptotic analysis, it is suggested that the implied growth rates distribution takes a Laplace shape. By performing a complete analytical investigation, I show that this statement is not correct. The implied distribution does in general possess a non-continuous component and becomes degenerate when perfect correlation is assumed between size levels at different time steps. Essentially, the approach is faulty as it treats firm size levels as stationary stochastic variables and neglects the integrated nature of the growth process
On the irreconcilability of Pareto and Gibrat laws
Full text linkIf business firms face a multiplicative growth process in which their growth rates are independent from their sizes, then these sizes cannot be distributed according to a stationary Pareto distribution. At the same time , the Laplace distribution of growth rates cannot be easily reconciled with a Pareto distribution of firm sizes. Recent contributions, using formal arguments, seems to contrast these statements. We prove that the proposed formal results are wrong
On the irreconcilability of Pareto and Gibrat laws
No full textIf business firms face a multiplicative growth process in which their growth rates are Laplace distributed and independent from their sizes, the size cannot be distributed according to a stationary Pareto distribution. Recent contributions, using formal arguments, seem to contrast with these statements. We prove that the proposed formal results are wrong
Price and Wealth Dynamics in a Speculative Market with an Arbitrary Number of Generic Technical Traders
No full textCorrigendum to “A general equilibrium model of investor sentiment” [Economics Letters 218 (2022) 110749]
Full text linkCities and Clusters: Economy-Wide and Sector-Specific Effects in Corporate Location
Full text linkAre the observed spatial distributions of firms decided mostly by economy-wide urbanization economies or rather by sector-specific localization economies? This paper finds that the latter kind of forces weight systematically more than the former in deciding firm location. The analysis uses Italian data on a variety of manufacturing and service sectors spatially disaggregated at the level of local labour market areas
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