An approach for measuring corporation financial stability by Econophysics and Bayesian method

Guang-Yan Zhong, Jiang-Cheng Li, Dong-Cheng Mei and Nian-Sheng Tang

Physica A: Statistical Mechanics and its Applications, 2019, vol. 527, issue C

Abstract: Corporation financial stability was investigated by the method of Econophysics and Bayesian approach in this paper. A stochastic predator–prey model was built to describe the corporation financial condition. The mean limiting extinction time was proposed to measure the corporation financial stability. The model parameters were estimated by using Bayesian approach with real corporation financial data. Experimental results show that: (i) an increase of system risk corresponds to a decrease of the corporation stability; (ii) the optimal initial financial condition enhances the corporation stability to its maximum extent; (iii) under the optimal initial financial condition, the optimal system parameters and system risk strength can be observed.

Keywords: Bayesian approach; Stability; Predator–prey behaviour; Mean extinction time; Econophysics (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:527:y:2019:i:c:s0378437119307216

DOI: 10.1016/j.physa.2019.121197

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