Big Data and Firm Dynamics

Maryam Farboodi, Roxana Mihet, Thomas Philippon, Laura Veldkamp

NBER Working Paper No. 25515
Issued in January 2019
NBER Program(s):Corporate Finance, Economic Fluctuations and Growth, Industrial Organization, Productivity, Innovation, and Entrepreneurship

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.

Acknowledgments and Disclosures

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Document Object Identifier (DOI): 10.3386/w25515

Published: Maryam Farboodi & Roxana Mihet & Thomas Philippon & Laura Veldkamp, 2019. "Big Data and Firm Dynamics," AEA Papers and Proceedings, vol 109, pages 38-42. citation courtesy of