On the growth of Iberian firms: An empirical analysis

Rui Pascoal, M. Augusto and Humberto Rocha

Physica A: Statistical Mechanics and its Applications, 2019, vol. 531, issue C

Abstract: The growth dynamics of firms have been object of numerous studies by econophysicists. The vast majority of these studies was done for large developed countries including the United States of America (US), France and Italy. These studies were conducted for countries with strong economies and whose business fabric has different characteristics from countries such as Portugal or Spain, with more large-sized firms and less micro-sized firms. It is thus important to study the growth dynamics of firms in Portugal and Spain, countries with economies that typically display anemic growth indexes and have a larger percentage of micro-sized firms. Considering two large samples of Portuguese and Spanish firms, we find that the size distribution of firms is well fitted by the generalized Pareto distribution. Moreover, the distribution of Iberian firms annual growth rates is best approximated by the Cauchy distribution rather than the Laplace distribution. Firms growth standard deviation conditional on size is well approximated by power-law relationships with a scaling exponent close to 12 for micro/small-sized firms and close to 0 for medium/large-sized firms.

Keywords: Iberian firms; Firm growth; Power-law distributions; Econophysics (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:531:y:2019:i:c:s0378437119310556

DOI: 10.1016/j.physa.2019.121797

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