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- Publisher
- Wiley
- Copyright
- Copyright © 2006 Wiley Subscription Services, Inc., A Wiley Company
- ISSN
- 0741-6261
- eISSN
- 1756-2171
- DOI
- 10.1111/j.1756-2171.2006.tb00014.x
- Publisher site
- See Article on Publisher Site
Abstract
Empirical analyses on aggregated datasets have revealed a common exponential behavior in the shape of the probability density of corporate growth rates. We present clear‐cut evidence on this topic using disaggregated data. We explain the observed regularities proposing a model in which firms' ability to take up new business opportunities increases with the number of opportunities already exploited. A theoretical result is presented for the limiting case in which the number of firms and opportunities go to infinity. Moreover, using simulations, we show that even in a small industry the agreement with asymptotic results is almost complete.
Journal
The Rand Journal of Economics – Wiley
Published: Jun 1, 2006