A statistical physics implementation of Coase׳s theory of the firm

Sergey V. Buldyrev, Michael Salinger and H. Eugene Stanley

Research in Economics, 2016, vol. 70, issue 4, 536-557

Abstract: We present a stochastic, dynamic model of firm growth that captures the essential features of Coase׳s theory of the firm and reproduces important statistical regularities in firm size and growth. For the model to generate these statistical regularities, the parameters must be tuned so that firms involved in “unrelated” activities evolve. Thus, at the same time that the model predicts the statistical properties of firm growth, it suggests that attempts to validate Coase׳s theory at the level of the individual firm might be futile. The model draws on models of critical phenomena from statistical physics, the motivation being that the observed statistical properties of firm growth are similar to the statistical properties of physical systems near their critical point.

Keywords: Theory of the firm; Firm growth; Statistical mechanics (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1090944316301478
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:70:y:2016:i:4:p:536-557

DOI: 10.1016/j.rie.2016.08.005

Access Statistics for this article

Research in Economics is currently edited by Federico Etro

More articles in Research in Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().