Scale-free phenomenon in industries in China

Da-Hai Tang, Bo-Kui Chen, Ya-Chun Gao and Bing-Hong Wang

Physica A: Statistical Mechanics and its Applications, 2013, vol. 392, issue 23, 5914-5919

Abstract: In this paper, we investigate the data of industries in China and find that the frequency distributions of fixed assets and fixed-assets’ investment of industries obey power laws. We show that these power-law modes can be explained by the rules of the Simon Model, rather than the existing investment theories such as the classical investment theory or acceleration principle. Moreover, the mechanism of the investment distribution may be similar to the forest-fire model of self-organizing criticality. By introducing the complex system methods, this research changes the traditional opinion of the investment and gains some meaningful understanding in the dynamics of industries and the economic cycle.

Keywords: Economic; Industry; Power-law; Self-organized criticality; Complexity; Scale-free (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:392:y:2013:i:23:p:5914-5919

DOI: 10.1016/j.physa.2013.07.044

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