Abstract

http://ssrn.com/abstract=1974390
 


 



A New Method for Measuring Tail Exponents of Firm Size Distributions


Shouji Fujimoto


affiliation not provided to SSRN

Atushi Ishikawa


affiliation not provided to SSRN

Takayuki Mizuno


Hitotsubashi University

Tsutomu Watanabe


Hitotsubashi University - Institute of Economic Research

2011

Economics: The Open-Access, Open-Assessment E-Journal, Vol. 5, 2011-20

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.

Number of Pages in PDF File: 21

Keywords: econophysics, power-law distributions, power-law exponents, firm size variables, finite size effect

JEL Classification: C16, C18, D20, E23

Accepted Paper Series


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Date posted: December 19, 2011  

Suggested Citation

Fujimoto, Shouji and Ishikawa, Atushi and Mizuno, Takayuki and Watanabe, Tsutomu, A New Method for Measuring Tail Exponents of Firm Size Distributions (2011). Economics: The Open-Access, Open-Assessment E-Journal, Vol. 5, 2011-20. Available at SSRN: http://ssrn.com/abstract=1974390 or http://dx.doi.org/10.5018/economics-ejournal.ja.2011-20

Contact Information

Shouji Fujimoto (Contact Author)
affiliation not provided to SSRN
No Address Available
Atushi Ishikawa
affiliation not provided to SSRN
No Address Available
Takayuki Mizuno
Hitotsubashi University ( email )
2-1 Naka Kunitachi-shi
Tokyo 186-8601
Japan
Tsutomu Watanabe
Hitotsubashi University - Institute of Economic Research ( email )
2-1 Naka Kunitachi-shi
Tokyo 186-8306
Japan
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