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Schumpeterian Dynamism or Socialization: Persistence of Firm Dominance

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  • Dieter Van Esbroeck

Abstract

This paper assesses whether the persistence of firm dominance reflects Schumpeterian dynamism or socialization. A cross-country comparison encompassing Europe, North America and Asia using the Forbes Global 2000 reveals comparable levels of dynamism. The evolution over time is examined for the United States based on Compustat and the Fortune 500, finding an increase in dynamism since 1950. An analysis of the Brussels Stock Exchange shows that the survival probability at the top has remained fairly stable in Belgium for almost two centuries. Generally, firms have a similar chance of survival at the top irrespective of their ranking and firms that have been present longer at the top have a slight advantage for persistence. Multiple mechanisms are identified as potential drivers. The empirical results suggest a Poisson process to model large firm dynamics which, combined with geometric Brownian motion, leads to power-law behavior in the tail of firm size.

Suggested Citation

  • Dieter Van Esbroeck, 2025. "Schumpeterian Dynamism or Socialization: Persistence of Firm Dominance," Working Papers of VIVES - Research Centre for Regional Economics 760653, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    • Handle: RePEc:ete:vivwps:760653
    Note: paper number 101
    as

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