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Title:A new method for measuring tail exponents of firm size distributions PDF Logo
Authors:Fujimoto, Shouji
Ishikawa, Atushi
Mizuno, Takayuki
Watanabe, Tsutomu
Issue Date:2011
Citation:[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [Volume:] 5 [Issue:] 2011-20 [Pages:] 1-20
Abstract:The authors propose a new method for estimating the power-law exponents of firm size variables. Their focus is on how to empirically identify a range in which a firm size variable follows a power-law distribution. On the one hand, as is well known a firm size variable follows a power-law distribution only beyond some threshold. On the other hand, in almost all empirical exercises, the right end part of a distribution deviates from a power-law due to finite size effects. The authors modify the method proposed by Malevergne et al. (2011). In this way they can identify both the lower and the upper thresholds and then estimate the power-law exponent using observations only in the range defined by the two thresholds. They apply this new method to various firm size variables, including annual sales, the number of workers, and tangible fixed assets for firms in more than thirty countries.
Subjects:econophysics
power-law distributions
power-law exponents
firm size variables
finite size effect
JEL:C16
C18
D20
E23
Persistent Identifier of the first edition:doi:10.5018/economics-ejournal.ja.2011-20
Creative Commons License:http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type:Article
Appears in Collections:Economics: The Open-Access, Open-Assessment E-Journal - Journal Articles

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