Power law in firms bankruptcy

DOI10.1016/J.PHYSLETA.2006.09.034zbMATH Open1175.91128arXivphysics/0701302OpenAlexW2103984581MaRDI QIDQ2385704FDOQ2385704

Authors: Byoung Hee Hong, Kyoung Eun Lee, Jae Woo Lee 

Publication date: 15 October 2007

Published in: Physics Letters. A (Search for Journal in Brave)

Abstract: We consider the scaling behaviors for fluctuations of the number of Korean firms bankrupted in the period from August 1 2002 to October 28 2003. We observe a power law for the distribution of the number of the bankrupted firms. The Pareto exponent is close to unity. We also consider the daily increments of the number of firms bankrupted. The probability distribution of the daily increments for the firms bankrupted follows the Gaussian distribution in central part and has a fat tail. The tail parts of the probability distribution of the daily increments for the firms bankrupted follow a power law.

Full work available at URL: https://arxiv.org/abs/physics/0701302

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zbMATH Keywords

econophysicsself-organized criticalitystock marketbankruptcyZipf law

Mathematics Subject Classification ID

Economic models of real-world systems (e.g., electricity markets, etc.) (91B74) Applications of statistical and quantum mechanics to economics (econophysics) (91B80) Corporate finance (dividends, real options, etc.) (91G50)

Cites Work

• Title not available (Why is that?)
• Critical market crashes

Cited In (3)

• Power law distribution of the frequency of demises of US firms
• Power laws and macroeconomic fluctuations
• Jump diffusion models and the evolution of financial prices

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