Scaling behavior in economics: I. Empirical results for company growth

We address the question of the growth of firm size. To this end, we analyze the Compustat data base comprising all publicly-traded United States manufacturing firms within the years 1974-1993. We find that the distribution of firm sizes remains stable for the 20 years we study, i.e., the mean value and standard deviation remain approximately constant. We study the distribution of sizes of the ``new'' companies in each year and find it to be well approximated by a log-normal. We find (i) the distribution of the logarithm of the growth rates, for a fixed growth period of one year, and for companies with approximately the same size $S$ displays an exponential form, and (ii) the fluctuations in the growth rates -- measured by the width of this distribution $\sigma_1$ -- scale as a power law with $S$, $\sigma_1\sim S^{-\beta}$. We find that the exponent $\beta$ takes the same value, within the error bars, for several measures of the size of a company. In particular, we obtain: $\beta=0.20\pm0.03$ for sales, $\beta=0.18\pm0.03$ for number of employees, $\beta=0.18\pm0.03$ for assets, $\beta=0.18\pm0.03$ for cost of goods sold, and $\beta=0.20\pm0.03$ for property, plant, & equipment.Comment: 16 pages LateX, RevTeX 3, 10 figures, to appear J. Phys. I France (April 1997

The Body Dances: Carnival Dance and Organization

Building on the work of Pierre Bourdieu and Maurice Merleau-Ponty we seek to open up traditional categories of thought surrounding the relation `body-organization' and elicit a thought experiment: What happens if we move the body from the periphery to the centre? We pass the interlocking theoretical concepts of object-body/subject-body and habitus through the theoretically constructed empirical case of `carnival dance' in order to re-evaluate such key organizational concepts as knowledge and learning. In doing so, we connect with an emerging body of literature on `sensible knowledge'; knowledge that is produced and preserved within bodily practices. The investigation of habitual appropriation in carnival dance also allows us to make links between repetition and experimentation, and reflect on the mechanism through which the principles of social organization, whilst internalized and experienced as natural, are embodied so that humans are capable of spontaneously generating an infinite array of appropriate actions. This perspective on social and organizational life, where change and permanence are intricately interwoven, contrasts sharply with the dominant view in organization studies which juxtaposes change/ creativity and stability

Bootstrap methods for the empirical study of decision-making and information flows in social systems

Abstract: We characterize the statistical bootstrap for the estimation of information theoretic quantities from data, with particular reference to its use in the study of large-scale social phenomena. Our methods allow one to preserve, approximately, the underlying axiomatic relationships of information theory—in particular, consistency under arbitrary coarse-graining—that motivate use of these quantities in the first place, while providing reliability comparable to the state of the art for Bayesian estimators. We show how information-theoretic quantities allow for rigorous empirical study of the decision-making capacities of rational agents, and the time-asymmetric flows of information in distributed systems. We provide illustrative examples by reference to ongoing collaborative work on the semantic structure of the British Criminal Court system and the conflict dynamics of the contemporary Afghanistan insurgency

Financial development, property rights, and growth

The authors analyze how property rights affect the allocation of firms'available resources among different types of assets. In particular, they investigate empirically for a large number of countries whether firms in environments with more secure property rights allocate available resources more toward intangible assets and consequentially grow faster. The authors find that improved asset allocation due to better property rights has an effect on growth in sectoral value added equal to improved access to financing arising from greater financial development. The results are robust, using various samples and specifications, including controlling for growth opportunities.Labor Policies,Economic Theory&Research,International Terrorism&Counterterrorism,Environmental Economics&Policies,Banks&Banking Reform,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Governance Indicators,Real&Intellectual Property Law

Corporate governance in Germany: an economic perspective

A financial system can only perform its function of channelling funds from savers to investors if it offers sufficient assurance to the providers of the funds that they will reap the rewards which have been promised to them. To the extent that this assurance is not provided by contracts alone, potential financiers will want to monitor and influence managerial decisions. This is why corporate governance is an essential part of any financial system. It is almost obvious that providers of equity have a genuine interest in the functioning of corporate governance. However, corporate governance encompasses more than investor protection. Similar considerations also apply to other stakeholders who invest their resources in a firm and whose expectations of later receiving an appropriate return on their investment also depend on decisions at the level of the individual firm which would be extremely difficult to anticipate and prescribe in a set of complete contingent contracts. Lenders, especially long-term lenders, are one such group of stakeholders who may also want to play a role in corporate governance; employees, especially those with high skill levels and firm-specific knowledge, are another. The German corporate governance system is different from that of the Anglo-Saxon countries because it foresees the possibility, and even the necessity, to integrate lenders and employees in the governance of large corporations. The German corporate governance system is generally regarded as the standard example of an insider-controlled and stakeholder-oriented system. Moreover, only a few years ago it was a consistent system in the sense of being composed of complementary elements which fit together well. The first objective of this paper is to show why and in which respect these characterisations were once appropriate. However, the past decade has seen a wave of developments in the German corporate governance system, which make it worthwhile and indeed necessary to investigate whether German corporate governance has recently changed in a fundamental way. More specifically one can ask which elements and features of German corporate governance have in fact changed, why they have changed and whether those changes which did occur constitute a structural change which would have converted the old insider-controlled system into an outsider-controlled and shareholder-oriented system and/or would have deprived it of its former consistency. It is the second purpose of this paper to answer these questions. Revised version forthcoming in "The German Financial System", edited by Jan P. Krahnen and Reinhard H. Schmidt, Oxford University Press

Semantic discovery and reuse of business process patterns

Patterns currently play an important role in modern information systems (IS) development and their use has mainly been restricted to the design and implementation phases of the development lifecycle. Given the increasing significance of business modelling in IS development, patterns have the potential of providing a viable solution for promoting reusability of recurrent generalized models in the very early stages of development. As a statement of research-in-progress this paper focuses on business process patterns and proposes an initial methodological framework for the discovery and reuse of business process patterns within the IS development lifecycle. The framework borrows ideas from the domain engineering literature and proposes the use of semantics to drive both the discovery of patterns as well as their reuse