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Does classical competition explain the statistical features of firm growth?

Authors
Journal
Economics Letters
0165-1765
Publisher
Elsevier
Publication Date
Volume
101
Issue
3
Identifiers
DOI: 10.1016/j.econlet.2008.09.001
Keywords
  • Statistical Equilibrium
  • Classical Competition
  • Maximum Entropy
  • Profit Rates
  • Firm Growth Rates
  • Subbotin Distribution
  • Laplace Distribution

Abstract

Abstract We propose a statistical equilibrium model where the tendency for competition to equalize profit rates results in an exponential power (or Subbotin) distribution. The model supports and extends recent evidence on the Laplace distribution of firm growth rates.

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