Risk, variety and volatility: innovation,growth and stock prices in old and new

Mazzucato, Mariana (2003) Risk, variety and volatility: innovation,growth and stock prices in old and new. Journal of Evolutionary Economics, 13 (5). pp. 491-512. ISSN 0936-9937

Full text not available from this repository.

Abstract

The paper studies the patterns of volatility in firm growth rates and stock prices during the early phase of the life-cycle of an old economy industry, the US automobile industry from 1900-1930, and a new economy industry, the US PC industry from 1974-2000. In both industries, firm growth rates are more volatile in the period in which innovation is the most “radical”. This is also the period in which stock prices are more volatile. The comparison sheds light on the co-evolution of industrial and financial volatility and the relationship between this co-evolution and mechanisms of Schumpetarian creative destruction. Results provide insight into the debate on whether the statistical behavior of firm growth rates is well represented by Gibrat’s Law.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > SPRU - Science Policy Research Unit
Subjects: H Social Sciences
Depositing User: Joy Blake
Date Deposited: 06 Jan 2015 11:57
Last Modified: 06 Jan 2015 12:00
URI: http://sro.sussex.ac.uk/id/eprint/51897
📧 Request an update