Aggregate fluctuations and the distribution of firm growth rates

Giulio Bottazzi, Le Li () and Angelo Secchi
Additional contact information
Le Li: Chuo University - Chuo University

Post-Print from HAL

Abstract: We propose an aggregate growth index that explicitly accounts for fat tails in the firm size distribution and for the negative scaling relation between the size of the firm and the volatility of its growth rates. Using Compustat data on US publicly traded company, we show that the new index tracks aggregate fluctuations much better than simpler measures of central tendency of the dynamics of firms, like the growth rates sample average, confirming that the statistical properties characterizing the micro-economic dynamics of firms are relevant for the dynamics of the aggregate. To better characterize the origins of aggregate fluctuations, we decompose the index in two parts, describing, respectively, the modal (typical) value of log growth rates and the tilt (asymmetry) of their distribution. Regression analysis shows that models based on this decomposition, despite their simplicity, possess a remarkable explanatory and predictive power with respect to the aggregate growth.

Date: 2019-06
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Published in Industrial and Corporate Change, 2019, 28 (3), pp.635-656. ⟨10.1093/icc/dtz016⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Aggregate fluctuations and the distribution of firm growth rates (2019)
Working Paper: Aggregate fluctuations and the distribution of firm growth rates (2019)
Working Paper: Aggregate fluctuations and the distribution of firm growth rates (2017)
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:hal:journl:halshs-02301721

DOI: 10.1093/icc/dtz016

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().