Explaining the distribution of firm growth rates.

From: RAND Journal of Economics | Date: June 22, 2006| Author: Bottazzi, Giulio; Secchi, Angelo | Copyright information

Empirical analyses on aggregated datasets have revealed a common exponential behavior in the shape of the probability density of corporate growth rates. We present clear-cut evidence on this topic using disaggregated data. We explain the observed regularities proposing a model in which firms' ability to take up new business opportunities increases with the number of opportunities already exploited. A theoretical result is presented for the limiting case in which the number of firms...

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