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  4. May 2019
  5. Big Data and Firm Dynamics

AEA Papers and Proceedings

ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)

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Big Data and Firm Dynamics

  • Maryam Farboodi
  • Roxana Mihet
  • Thomas Philippon
  • Laura Veldkamp
AEA Papers and Proceedings
vol. 109, May 2019
(pp. 38–42)
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Abstract

We study a model where firms accumulate data as a valuable intangible asset. Data accumulation affects firms' dynamics. It increases the skewness of the firm size distribution as large firms generate more data and invest more in active experimentation. On the other hand, small data-savvy firms can overtake more traditional incumbents, provided they can finance their initial money-losing growth. Our model can be used to estimate the market and social value of data.

Citation

Farboodi, Maryam, Roxana Mihet, Thomas Philippon, and Laura Veldkamp. 2019. "Big Data and Firm Dynamics." AEA Papers and Proceedings, 109: 38–42. DOI: 10.1257/pandp.20191001

Additional Materials

JEL Classification

  • C55 Large Data Sets: Modeling and Analysis
  • D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
  • G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
  • L25 Firm Performance: Size, Diversification, and Scope