How Big Firms Handle Info: A Peek Inside

Ever wondered how big companies manage information flow? Let's dive in! We've looked at a massive dataset of articles accessed by employees across millions of firms. Want to know what we found? Well, it's interesting! We checked three things: how much employees read, the variety of articles they read, and the size of their firms. First, we discovered that as firms grow, they don't just increase their reading volume. Instead, it grows at a slower pace, like a classic economy of scale. This means bigger firms read more efficiently, following a pattern known as Zipf's law.

Next, we noticed something about variety. Once firms reach a certain size, they tend to read similar articles over and over. This could be a sign of a coordination problem—think of teams struggling to share new ideas. Lastly, we saw that larger firms often stick to a narrow range of topics. This could be due to structural constraints—like having too many people makes it hard to explore new areas. Here's where it gets exciting! We found that firms that read more than expected (beyond the usual scale) had better returns and higher valuations. This shows that how a firm handles information really matters—it's not just about individual employees. Other systems, like biological collectives, might also benefit from understanding this.

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