Why are distributions of firm growth rates tent-shaped?

Why are distributions of firm growth rates tent-shaped?

Recent empirical analyses on different datasets have revealed a common exponential behavior in the shape of the probability density of the corporate growth rates. We present new evidence on this topic from the Italian Manufacturing Industry and propose a very simple mechanism that, under rather gene...

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Veröffentlicht in:Economics letters 2003-09, Vol.80 (3), p.415-420
Hauptverfasser: Bottazzi, Giulio, Secchi, Angelo
Format: Artikel
Sprache:eng
Schlagworte:
Economics
Empiricism
Enterprises
Firm growth
Growth rates
Industrial organization
Italy
Laplace distribution
Manufacturing
Polya’s urn
Productive forces distribution
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Zusammenfassung:Recent empirical analyses on different datasets have revealed a common exponential behavior in the shape of the probability density of the corporate growth rates. We present new evidence on this topic from the Italian Manufacturing Industry and propose a very simple mechanism that, under rather general assumptions, provides a robust explanation for the observed regularities.
ISSN:0165-1765
1873-7374
DOI:10.1016/S0165-1765(03)00142-3