Working Paper: CEPR ID: DP13489
Authors: Laura Veldkamp; Maryam Farboodi; Roxana Mihet; Thomas Philippon
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.
Keywords: big data; firm size
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| data as a byproduct of economic activity (E01) | firm productivity (D22) |
| firms using data to increase efficiency (D22) | firm growth (L26) |
| active experimentation by firms (L26) | increased productivity (O49) |
| data accumulation (C80) | skewness of firm size distribution (D39) |
| larger firms generating more data (C55) | increased productivity (O49) |
| data utilization by small firms (L96) | ability to compete against larger firms (L25) |