A generalized preferential attachment model for business firms growth rates. I. Empirical evidence.

DOI10.1140/EPJB/E2007-00133-4MaRDI QIDQ978798zbMATH OpenOpenAlexWikidataFDO

Authors J. Martínez

Publication date 25 June 2010

Published in The European Physical Journal B. Condensed Matter and Complex Systems (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/physics/0609011

Mathematics Subject Classification ID

Applications of statistical and quantum mechanics to economics (econophysics) (91B80) Economic growth models (91B62) Time-dependent statistical mechanics (dynamic and nonequilibrium) (82C99)

Abstract: We introduce a model of proportional growth to explain the distribution $P(g)$ of business firm growth rates. The model predicts that $P(g)$ is Laplace in the central part and depicts an asymptotic power-law behavior in the tails with an exponent $zeta=3$. Because of data limitations, previous studies in this field have been focusing exclusively on the Laplace shape of the body of the distribution. We test the model at different levels of aggregation in the economy, from products, to firms, to countries, and we find that the its predictions are in good agreement with empirical evidence on both growth distributions and size-variance relationships.

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Cites work

• scientific article; zbMATH DE number 1614382 (Why is no real title available?)
• scientific article; zbMATH DE number 3609402 (Why is no real title available?)
• scientific article; zbMATH DE number 3240796 (Why is no real title available?)
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• On size and growth of business firms
• On the Gibrat Distribution
• Scaling the volatility of GDP growth rates
• The Pareto, Zipf and other power laws
• The variance of firm growth rates: The `scaling' puzzle

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• Preferential growth: solution and application to modeling stock market
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• A statistical equilibrium model of competitive firms
• Do firms share the same functional form of their growth rate distribution? A statistical test
• Global evidence on the distribution of firm growth rates
• Firms growth, distribution, and non-self-averaging revisited
• On size and growth of business firms
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• Why are distributions of firm growth rates tent-shaped?
• Generalised central limit theorems for growth rate distribution of complex systems
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