Random and non-Random Firm Growth Pattern and the Industry Life Cycle: A Combined Evolutionary Simulation and Empirical Analysis (Toke Reichstein PhD-project)

Toke Reichsteins PhD-project Gibrat's Law and the Industry Life Cycle theorem are two separate and to some extent alternative empirically based propositions as to how the economic environment evolve in terms of industrial dynamics. While Gribrtas Law offers no explanatory power in terms of the firm growth process and changes in industry structures, the Industry Life Cycle theorem highlights several stylized deterministic forces. It is the overall aim to put some explanatory power into a theory of firm growth which specifically puts focus on technological change as the driving force of shaping industry structural evolution. The outcome should at least to some extent have some similarities with the 'stylised facts' in terms of firm growth and size distribution as well as the pattern prescribed by the Industry Life Cycle model. Methodological speaking the work comprises of both simulation based modelling and empirical analysis. The empirical analysis is used to test some of propositions indirectly found through the simulations. these simulations follow the work by Nelson & Winter and hence draws on evolutionary mechnisms