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Firms Growth Dynamics, Competition and Power Law Scaling

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  • Hari M. Gupta

    (Unesp - IGCE, Physics Dpto. Rio Claro, Sao Paulo, Brazil)

  • Jose R. Campanha

    (Unesp - IGCE, Physics Dpto. Rio Claro, Sao Paulo, Brazil)

Abstract

We study the growth dynamics of the size of manufacturing firms considering competition and normal distribution of competency. We start with the fact that all components of the system struggle with each other for growth as happened in real competitive bussiness world. The detailed quantitative agreement of the theory with empirical results of firms growth based on a large economic database spanning over 20 years is good .Further we find that this basic law of competition leads approximately a power law scaling over a wide range of parameters. The empirical datas are in accordance with present theory rather than a simple power law.

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  • Hari M. Gupta & Jose R. Campanha, 2002. "Firms Growth Dynamics, Competition and Power Law Scaling," Papers cond-mat/0201219, arXiv.org.
    • Handle: RePEc:arx:papers:cond-mat/0201219
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