A generalized preferential attachment model for business firms growth rates

Fabio Pammolli (), D. Fu (), S. V. Buldyrev (), Massimo Riccaboni (), K. Matia (), K. Yamasaki () and H. E. Stanley ()

The European Physical Journal B: Condensed Matter and Complex Systems, 2007, vol. 57, issue 2, 127-130

Abstract: We introduce a model of proportional growth to explain the distribution P(g) of business firm growth rates. The model predicts that P(g) is Laplace in the central part and depicts an asymptotic power-law behavior in the tails with an exponent ζ=3. Because of data limitations, previous studies in this field have been focusing exclusively on the Laplace shape of the body of the distribution. We test the model at different levels of aggregation in the economy, from products, to firms, to countries, and we find that the predictions are in good agreement with empirical evidence on both growth distributions and size-variance relationships. Copyright EDP Sciences/Società Italiana di Fisica/Springer-Verlag 2007

Keywords: 89.75.Fb Structures and organization in complex systems, 05.70.Ln Nonequilibrium and irreversible thermodynamics, 89.75.Da Systems obeying scaling laws, 89.65.Gh Economics; econophysics, financial markets, business and management, (search for similar items in EconPapers)
Date: 2007
References: View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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DOI: 10.1140/epjb/e2007-00133-4

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