Healthy Skepticism Library item: 4742

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Fu D, Pammolli F, Buldyrev SV, Riccaboni M, Matia K, Yamasaki K, Stanley HE.
The growth of business firms: theoretical framework and empirical evidence.
Proc Natl Acad Sci U S A 2005 Dec 27; 102:(52):18801-6
http://www.ncbi.nlm.nih.gov/entrez/utils/lofref.fcgi?PrId=3051&uid=16365284&db=PubMed&url=http://www.pnas.org/cgi/pmidlookup?view=long&pmid=16365284

Abstract:

We introduce a model of proportional growth to explain the distribution P(g)(g) of business-firm growth rates. The model predicts that P(g)(g) is exponential in the central part and depicts an asymptotic power-law behavior in the tails with an exponent zeta = 3. Because of data limitations, previous studies in this field have been focusing exclusively on the Laplace shape of the body of the distribution. In this article, we test the model at different levels of aggregation in the economy, from products to firms to countries, and we find that the predictions of the model agree with empirical growth distributions and size-variance relationships.

Keywords:
Commerce Drug Industry/economics* Models, Statistical Models, Theoretical Research Support, Non-U.S. Gov't Research Support, U.S. Gov't, Non-P.H.S.