Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/57544 
Year of Publication: 
2010
Series/Report no.: 
Papers on Economics and Evolution No. 1018
Publisher: 
Max Planck Institute of Economics, Jena
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: 
Document Type: 
Working Paper

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