Juliane Begenau is the Business
School Trust Faculty Scholar for
2018–19 and an assistant professor
of finance at Stanford GSB.
and 2007. By a slew of different growth
measures, from assets and capital stock
to sales and market value, the growth gap
between big and small companies widened
sharply after 1980.
To be sure, Begenau says, this hardly
means that big companies inevitably
get bigger and that small companies are
destined to fall behind. The last 30 years
have seen scores of once-small startups
become towering global giants before their
founders reached the age of 40. Likewise,
many iconic blue chip companies have
shrunk — see the current woes of General
Electric — or disappeared entirely.
That said, should a data-fueled trend
toward bigness mean that the playing
field has been permanently tipped in favor
of established companies? Does it raise
concerns about monopoly power?
“It’s too early to say,” Begenau says.
“In many ways, our paper raises more
questions than it answers.”
Their goal, she says, was to shine
a new light on one of the many overlooked
implications of the big data explosion.
“This seems to be an important
future feature of our economy, and we
need to understand the effects of all this
information technology,” she says.
“We’ve barely scratched the surface.
We know that it has benefited lots
of consumers, that it’s super convenient,
and that it allows us to work more
flexibly and efficiently. But we need to
understand the other consequences.
This is a very small piece of that
INFORMATION IS MONEY Financing is easier — and cheaper — to acquire as firms collect more data.