On the mean/variance relationship of the firm size distribution: evidence and some theory

In this paper we make use of firm-level data for a sample of European countries to prove the existence of a positive linear relationship between the mean and the variance of firms’ size, an empirical regularity known in mathematical biology as the Taylor power law. A computerized experiment is used to show that the estimated slope of the linear relationship can be fruitfully employed to discriminate among alternative theories of firms’ growth.

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Year of publication:	2008
Authors:	Gaffeo, Edoardo ; Guilmi, Corrado di ; Gallegati, Mauro ; Russo, Alberto
Institutions:	Dipartimento di Economia e Management, Università degli Studi di Trento
Subject:	Taylor power law \| Firm size distribution \| Stochastic growth

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Extent:	application/pdf
Series:	Department of Economics Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 0805
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005121049