Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145978
Authors: 
Cordes, Christian
Su, Tong-Yaa
Strimling, Pontus
Year of Publication: 
2015
Series/Report no.: 
Papers on Economics and Evolution 1506
Abstract: 
This paper relates firm-level processes and size distributions of firms at the industry level. An analytically tractable model explores how firm growth, exit, and spinoff activity in combination with systematically appearing growth crises in organizational development translate into specific steady-state firm size distributions (FSDs). Based on anthropological, social-psychological, and economic evidence on the effects of increasing group size on performance, the model features a critical organizational size that triggers these growth crises. Together, these processes generate empirically observable size distributions of firms including right-skewed and Pareto distributions as well as self-reinforcing spinoff processes that affect an industry's FSD.
Subjects: 
Firm Size Distributions
Firm Growth
Critical Firm Size
Industry Evolution
JEL: 
L11
D21
C61
Document Type: 
Working Paper

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