SCALING BEHAVIOR IN ECONOMICS .1. EMPIRICAL RESULTS FOR COMPANY GROWTH

We address the question of the growth of firm size. To this end, we an alyze the Compustat data base comprising all publicly-traded United St ates 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 consta nt. We study the distribution of sizes of the ''new'' companies in eac h 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 g rowth period of one year, and for companies with approximately the sam e size S, displays an exponential form, and (ii) the fluctuations in t he growth rates - measured by the width of this distribution sigma(1) - scale as a power law with S, sigma(1) similar to S-beta. We find tha t the exponent beta takes the same value, within the error bars, for s everal measures of the size of a company. In particular, we obtain: be ta = 0.20 +/- 0.03 for sales, beta = 0.18 +/- 0.03 for number of emplo yees, beta = 0.18 +/- 0.03 for assets, beta = 0.18 +/- 0.03 for cost o f goods sold, and beta = 0.20 +/- 0.03 for property, plant, and equipm ent.