Discussion Paper Details

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Title: Big Data and Firm Dynamics

Author(s): Maryam Farboodi, Roxana Mihet, Thomas Philippon and Laura Veldkamp

Publication Date: January 2019

Keyword(s): Big Data and firm size

Programme Area(s): Industrial Organization, Macroeconomics and Growth and Monetary Economics and Fluctuations

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.

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Bibliographic Reference

Farboodi, M, Mihet, R, Philippon, T and Veldkamp, L. 2019. 'Big Data and Firm Dynamics'. London, Centre for Economic Policy Research.