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Statistical Properties of Business Firms Structure and Growth

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Listed:
  • Kaushik Matia
  • Dongfeng Fu
  • Sergey V. Buldyrev
  • Fabio Pammolli
  • Massimo Riccaboni
  • H. Eugene Stanley

Abstract

We analyze a database comprising quarterly sales of 55624 pharmaceutical products commercialized by 3939 pharmaceutical firms in the period 1992--2001. We study the probability density function (PDF) of growth in firms and product sales and find that the width of the PDF of growth decays with the sales as a power law with exponent $\beta = 0.20 \pm 0.01$. We also find that the average sales of products scales with the firm sales as a power law with exponent $\alpha = 0.57 \pm 0.02$. And that the average number products of a firm scales with the firm sales as a power law with exponent $\gamma = 0.42 \pm 0.02$. We compare these findings with the predictions of models proposed till date on growth of business firms.

Suggested Citation

  • Kaushik Matia & Dongfeng Fu & Sergey V. Buldyrev & Fabio Pammolli & Massimo Riccaboni & H. Eugene Stanley, 2005. "Statistical Properties of Business Firms Structure and Growth," Papers physics/0502081, arXiv.org.
    • Handle: RePEc:arx:papers:physics/0502081
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    Citations

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    Cited by:

    1. Kaldasch, Joachim, 2011. "Evolutionary model of an anonymous consumer durable market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(14), pages 2692-2715.
    2. Xie, Wen-Jie & Gu, Gao-Feng & Zhou, Wei-Xing, 2010. "On the growth of primary industry and population of China’s counties," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(18), pages 3876-3882.
    3. Alex Coad & Christina Guenther, 2013. "Diversification patterns and survival as firms mature," Small Business Economics, Springer, vol. 41(3), pages 633-649, October.
    4. Fu, Dongfeng & Pammolli, Fabio & Buldyrev, Sergey V. & Riccaboni, Massimo & Matia, Kaushik & Yamasaki, Kazuko & Stanley, H. Eugene, 2005. "The Growth of Business Firms: Theoretical Framework and Empirical Evidence," MPRA Paper 15905, University Library of Munich, Germany.
    5. Stanley, H.E. & Gabaix, Xavier & Gopikrishnan, Parameswaran & Plerou, Vasiliki, 2007. "Economic fluctuations and statistical physics: Quantifying extremely rare and less rare events in finance," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 382(1), pages 286-301.
    6. Kaldasch, Joachim, 2012. "Evolutionary model of the growth and size of firms," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(14), pages 3751-3769.
    7. Ishikawa, Atushi, 2008. "Power-Law and Log-Normal Distributions in Firm Size Displacement Data," Economics Discussion Papers 2008-45, Kiel Institute for the World Economy (IfW Kiel).
    8. Martin Andersson & Börje Johansson, 2012. "Heterogeneous Distributions of Firms Sustained by Innovation Dynamics—A Model with Empirical Illustrations and Analysis," Journal of Industry, Competition and Trade, Springer, vol. 12(2), pages 239-263, June.
    9. Ishikawa, Atushi, 2009. "Power-Law and Log-Normal Distributions in Temporal Changes of Firm-Size Variables," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-25.
    10. Marco Capasso & Elena Cefis, 2012. "Firm Size and Growth Rate Variance: The Effects of Data Truncation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 41(3), pages 193-205, November.
    11. Pammolli, Fabio & Fu, Dongfeng & Buldyrev, Sergey V. & Riccaboni, Massimo & Matia, Kaushik & Yamasaki, Kazuko & Stanley, H. Eugene, 2006. "A Generalized Preferential Attachment Model for Business Firms Growth Rates: I. Empirical Evidence," MPRA Paper 15983, University Library of Munich, Germany.
    12. Marco Capasso & Elena Cefis & Alessandro Sapio, 2013. "Reconciling quantile autoregressions of firm size and variance–size scaling," Small Business Economics, Springer, vol. 41(3), pages 609-632, October.
    13. Castaldi, Carolina & Milakovic, Mishael & Secchi, Angelo, 2006. "Scale and technological factors in the diversification structure of business firms," Economics Letters, Elsevier, vol. 91(1), pages 117-121, April.
    14. Yamasaki, Kazuko & Matia, Kaushik & Buldyrev, Sergey V. & Fu, Dongfeng & Pammolli, Fabio & Riccaboni, Massimo & Stanley, H. Eugene, 2004. "Preferential attachment and growth dynamics in complex systems," MPRA Paper 15908, University Library of Munich, Germany, revised 06 Feb 2006.
    15. Alex Coad, 2008. "Firm growth and scaling of growth rate variance in multiplant firms," Economics Bulletin, AccessEcon, vol. 12(9), pages 1-15.
    16. Stanley, H. Eugene & Plerou, Vasiliki & Gabaix, Xavier, 2008. "A statistical physics view of financial fluctuations: Evidence for scaling and universality," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(15), pages 3967-3981.

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