Pareto index induced from the scale of companies

Atushi Ishikawa

Physica A: Statistical Mechanics and its Applications, 2006, vol. 363, issue 2, 367-376

Abstract: Employing profits data of Japanese companies in 2002 and 2003, we confirm that Pareto's law and the Pareto index are derived from the law of detailed balance and Gibrat's law. The last two laws are observed beyond the region where Pareto's law holds. By classifying companies into job categories, we find that companies in a small-scale job category have more possibilities of growing than those in a large-scale job category. This kinematically explains that the Pareto index for the companies in the small-scale job class is larger than that for the companies in the large-scale job class.

Keywords: Econophysics; Pareto law; Gibrat law; Detailed balance; Reflection law (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:363:y:2006:i:2:p:367-376

DOI: 10.1016/j.physa.2005.08.038

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