ABB  Vol.3 No.1 , February 2012
Industry dynamics in biotechnology
Author(s) Fariba Hashemi
ABSTRACT
The field of modern biotechnology is thought to have largely begun in 1980, when the United States Supreme Court ruled that a genetically-modified microorganism could be patented. The growth of the Biotechnology industry has stimulated extensive research on its determinants. One of the areas which has attracted a fair amount of attention is the distribution of firm size within an industry. What is less known however, is the dynamics of firm size. This paper considers a statistical model to describe the spatial dynamics of firm size across the biotechnology industry. It is found that firm size fluctuates around its long run stationary equilibrium according to a temporal drift and random disturbance. The empirical results illustrate that diffusion is a potential technique for the analysis of spatial dynamics of firm size.

Cite this paper
Hashemi, F. (2012) Industry dynamics in biotechnology. Advances in Bioscience and Biotechnology, 3, 35-39. doi: 10.4236/abb.2012.31006.
References
[1]   Ijiri, Y. and Simon, H.A. (1977) Interpretations of departures from the pareto curve firm-size distributions. Journal of Political Economy, 82, 315-331. doi:10.1086/260194

[2]   Simon, H.A. and Bonini, C.P. (1958) The size distribution of business firms. American Economic Review, 48, 607-617.

[3]   Hopenhayn, H.A. (1992) Entry, exit, and firm dynamics in long run equilibrium. Econometrica, 60, 1127-1150. doi:10.2307/2951541

[4]   Axtel, R. (2001) Zip distribution of US firm sizes. Science, 293, 1818-1820. doi:10.1126/science.1062081

[5]   Lucas, R.E. (1978) On the size-distribution of business firms. Bell Journal of Economics, 9, 508-523. doi:10.2307/3003596

[6]   Segerstrom, P.S. (1991) Innovation, imitation, and economic growth. Journal of Political Economy, 99, 807- 827. doi:10.1086/261779

[7]   Simon, H.A. and Charles P.B. (1958) The size distribution of business firms. American Economic Review, 48, 607-617.

[8]   Sutton, J. (1998) Technology and market structure: Theory and history. MIT Press, Cambridge.

[9]   McCloughan, P. (1995) Modified gibrat growth, entry, exit and concentration development. Journal of Journal of Industrial Economics, 43, 4053.

[10]   Jovanovic, B. (1982) Selection and the evolution of industry. Econometrica, 50, 649-670. doi:10.2307/1912606

[11]   Levine, D. (2011) Neuroeconomics? International Review of Economics, forthcoming. doi:10.1007/s12232-011-0128-7

[12]   Fudenberg, D. and Levine, D. (2009) Learning and equilibrium. Annual Review of Economics, 1, 385-419. doi:10.1146/annurev.economics.050708.142930

[13]   Besson, O. and de Montmollin, G. (2004) Space-time integrated least squares: A time-marching approach. International Journal for Numerical Methods in Fluids, 44, 525-543

[14]   Okubo, A. (1980) Diffusion and ecologyical problem: Mathematical models’. Biomathematics, 10, Springer-Verlag, Berlin.

[15]   Hashemi, F. (2003) A dynamic model of size distribution of firms applied to US biotechnology and trucking industries. Small Business Economics, 21, 27-36. doi:10.1023/A:1024433203253

[16]   Sutton, J. (1997) Gibrat’s legacy. Journal of Economics Literature, 35, 40-59.

[17]   Pfaffermayr, M. (2008) Firm growth under sample selection: Conditional sigma convergence in firm size? Review of Industrial Organization, 31, 303-328. doi:10.1007/s11151-008-9159-y

[18]   Hutchinson, J. Konings, J. and Walsh, P. (2010) The firm size distribution and inter-industry diversification. Review of Industrial Organization, 37, 65-82. doi:10.1007/s11151-010-9260-x

[19]   Hongler, M.-O., Filliger, R. and Blanchard, P. (2006) Soluble Models for Dynamics Driven by a Super-Diffusive Noise. Physica, 370, 301-315. doi:10.1016/j.physa.2006.02.036

[20]   Hongler, M.-O., Soner, H. and Streit, L. (2004) Stochastic control for a class of random evolution models. Applied Mathematics and Optimization, 49, 113-121.

[21]   Hashemi, F. (2000) An evolutionary model of the size distribution of firms. Journal of Evolutionary Economics, 10, 507-521. doi:10.1007/s001910000048

[22]   Taylor, R. (1984) Predation, population and community biology series. Chapmann and Hall, London.

[23]   Ricciardi, L. (1977) Diffusion processes and related topics in biology. Lecture Notes in Biomathematics, Springer-Verlag, Berlin.

[24]   Friedman, M. (1992) Do old fallacies ever die? Journal of Economic Literature, 30, 2129-2132.

[25]   Quah, D. (2003) Empirics for economic growth and convergence, in “The economics of structural change”. Elgar Reference Collection, 3, pp. 174-196.

 
 
Top