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Title:Inter-firm rivalry and firm growth: Is there any evidence of direct competition between firms? PDF Logo
Authors:Coad, Alex
Teruel, Mercedes
Issue Date:2010
Series/Report no.:Papers on economics and evolution 1018
Abstract:Inter-firm competition has received much attention in the theoretical literature, but recent empirical work suggests that the growth rates of rival firms are uncorrelated, and that firm growth can be taken as an essentially independent process. We begin by investigating the correlations of the growth rates of competing firms (i.e. the largest and second-largest firms in the same industry) and observe that, surprisingly, the growth of these firms can be taken as independent. Nevertheless, peer-effect regressions, that take into account the simultaneous interdependence of growth rates of rival firms, are able to identify significant negative effects of rivals' growth on a firm's growth.
Subjects:Competition
Firm growth
Peer effects econometrics
JEL:L25
Persistent Identifier of the first edition:urn:nbn:de:gbv:27-20110628-151526-4
Document Type:Working Paper
Appears in Collections:Papers on Economics and Evolution, MPI für Ökonomik

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