We propose a parsimonious statistical model of firm competition where structural differences in the strength of competitive pressure and the magnitude of return fluctuations above and below the system-wide benchmark translate into a skewed Subbotin or asymmetric exponential power (AEP)...

The basic philosophy behind Gibrat’s rule of proportionate effect has been to find some common mechanism in the growth process of business firms, based on the idea that growth rates are independent of size and drawn from the same distribution. After decades of research, however, it seems fair...

This paper answers fundamental questions that have preoccupied modern economic thought since the 18th century. What is the aggregate real rate of return in the economy? Is it higher than the growth rate of the economy and, if so, by how much? Is there a tendency for returns to fall in the...

The cross-sectional variation in corporate profitability has occupied research across fields as diverse as strategic management, industrial organization, finance, and accounting. Prior work suggests that industry affiliation as well as different forms of corporate idiosyncrasies are important...

Economic systems produce robust statistical patterns in key sate variables including prices and incomes. Statistical equilibrium methods explain the distributional proper- ties of state variables as arising from specific institutional and behavioral postulates. Two traditions have developed in...

Regional growth dynamics significantly deviate from a normal process. Using industry-specific employment data for German regions, we find that the asymmetric Subbotin distribution is able to account properly for extreme positive and especially negative growth events. This result confirms...

This paper provides tables of critical values for some popular tests of cointegration and unit roots. Although these tables are necessarily based on computer simulations, they are much more accurate than those previously available. The results of the simulation experiments are summarized by...

We calculate numerically the asymptotic distribution functions of likelihood ratio tests for fractional unit roots and cointegration rank. Because these distributions depend on a real-valued parameter, b, which must be estimated, simple tabulation is not feasible. Partly due to the presence of...

This paper presents a model of firm localization allowing for non-linear, quadratic externalities. The model and its numerical estimation procedure manage to disentangle localization externalities from the intrinsic advantages of regions. Moreover, the introduction of a quadratic term can...