The Rise and Fall of Business Firms
The Rise and Fall of Business Firms
F. Pammolli, Politecnico di Milano
M. Riccaboni, IMT Institute for Advanced Studies, Lucca
H. E. Stanley, Boston University
£43.99
GBPAt the intersection between statistical physics and rigorous econometric analysis, this powerful new framework sheds light on how innovation and competition shape the growth and decline of companies and industries. Analyzing various sources of data including a unique micro level database which collects historic data on the sales of more than 3,000 firms and 50,000 products in 20 countries, the authors introduce and test a model of innovation and proportional growth, which relies on minimal assumptions and accounts for the empirically observed regularities. Through a combination of extensive stochastic simulations and statistical tests, the authors investigate to what extent their simple assumptions are falsified by empirically observable facts. Physicists looking for application of their mathematical and modelling skills to relevant economic problems as well as economists interested in the explorative analysis of extensive data sets and in a physics-orientated way of thinking will find this book a key reference.
- Gene Stanley is one of the founding fathers of the econophysics field; the book comes out twenty years since Stanley's seminal Introduction to Econophysics
- A unique combination of statistical physics and econometrics to data analysis and modelling
- Shows the potential of micro level analysis of large industrial databases - topical in the digital age
- Includes evidences from the key industry of pharmaceuticals, which represents a unique toy room for scholars interested in unravelling the relations between innovation and growth
- Constitutes a key contribution in the analysis of the role of innovation in shaping industrial and economic growth
Reviews & endorsements
'This is a superb and fascinating book. The distribution of firms' growth rates exhibits a large number of regularities, including some that are very hard to explain. The authors are pioneers in that enterprise, combining empirical and theoretical work. This team of economists and physicists provides a model for a future way to do economics.' Xavier Gabaix, Pershing Square Professor of Economics and Finance, Harvard University
'The Rise and Fall of Business Firms offers a lucid reconstruction and extension of the exciting developments that fundamentally reshaped our understanding of how firms grow and evolve, brought to you by the scientists responsible for the key discoveries. A must for anyone interested in the deep laws that govern economic processes.' Albert-László Barabási, Robert Gray Dodge Professor of Network Science, Northeastern University
'There is a long tradition of physicists being interested in and contributing to economics. That tradition continues here in The Rise and Fall of Business Firms. The book is based on generalized proportional growth models for the dynamics and stochastics of the growth and decline of business firms. For further studies, the book points out where more detailed specific inter-related complexities (such as among products, markets, and technologies) can be incorporated. The theoretical analysis paired with empirical data provides valuable insight for firms to understand their past trajectory and future choices.' Michael F. Schlesinger, Office of Naval Research
Product details
August 2020Adobe eBook Reader
9781316814604
0 pages
0kg
90 b/w illus. 13 tables
This ISBN is for an eBook version which is distributed on our behalf by a third party.
Table of Contents
- Preface
- 1. Introduction
- 2. Empirical regularities
- 3. Innovation and the growth of business firms: a stochastic framework
- 4. Testing our predictions
- 5. Testing our assumptions
- 6. Conclusions
- 7. Appendices
- References
- Author index
- Subject index.
