Working Paper: NBER ID: w25515
Authors: Maryam Farboodi; Roxana Mihet; Thomas Philippon; Laura Veldkamp
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 Dynamics; Data Accumulation; Firm Size Distribution
JEL Codes: D21; E01; L1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| data accumulation (C80) | skewness of the firm size distribution (D39) |
| skewness of the firm size distribution (D39) | larger firms generate more data (C55) |
| larger firms generate more data (C55) | active experimentation (C90) |
| data efficiency (D61) | competitive dynamics (L13) |
| small, data-savvy firms (L25) | larger, traditional firms (L25) |
| data utilization (L96) | firm performance (L25) |