Youn Baek (New York U (NYU) Leonard N. Stern Business) has posted “The Scale Effects of Data on Firm Growth: Evidence from the GDPR” on SSRN. Here is the abstract:
This paper investigates how the scale of data influences firm growth by leveraging the European Union’s General Data Protection Regulation (GDPR) as a natural experiment. Using bibliometric and patent data, I find that U.S.-based researchers and firms with greater reliance on European collaborators experienced declines in research output and firm performance after the GDPR took effect. While data is critical for improving decision-making and gaining competitive advantage, the analysis reveals that its effect on firm output remains the same regardless of initial AI‑inventor size, implying constant returns to scale. This result challenges the “data feedback loop” theory that more data begets disproportionate productivity gains by documenting that data accumulation alone may not confer a disproportionate advantage to larger firms.