On the Laplace Distribution of Firms Growth Rates

Giulio Bottazzi and Angelo Secchi

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

Abstract: A very robust stylized fact has recently emerged concerning the distribution of growth rates of manufacturing business firms. We briefly review past analysis and present new evidence on this topic from the Italian Manufacturing Industry. We then propose a very simple model that, under rather general assumptions, provides an excellent explanation for the observed regularities. The model is based on a very simple stochastic process describing the random partition of a number of ``business opportunities'' among a population of identical firms. A theoretical result is presented for the limiting case in which the number of firms and opportunities go to infinity. Moreover, using simulations, we show that even in a moderately small industry the agreement with asymptotic results is almost complete.

Keywords: - (search for similar items in EconPapers)
Date: 2002-12-24
New Economics Papers: this item is included in nep-ent and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.lem.sssup.it/WPLem/files/2002-20.pdf (application/pdf)

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:ssa:lemwps:2002/20

Access Statistics for this paper

More papers in LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).