A New Method for Measuring Tail Exponents of Firm Size Distributions

S. Fujimoto, A. Ishikawa, T. Mizuno, T. Watanabe, 努 渡辺 and ツトム ワタナベ

No 7, Working Paper Series from Center for Interfirm Network, Institute of Economic Research, Hitotsubashi University

Abstract: We propose a new method for estimating the power-law exponents of firm size variables. Our focus is on how to empirically identify a range in which a firm size variable follows a power-law distribution. 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 effect. We modify the method proposed by Malevergne et al. (2011) so that we can identify both of the lower and the upper thresholds and then estimate the power-law exponent using observations only in the range defined by the two thresholds. We 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.

Keywords: Econophysics; power-law distributions; power-law exponents; firm size variables; finite size effect (search for similar items in EconPapers)
JEL-codes: C16 C18 D20 E23 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2011-07
New Economics Papers: this item is included in nep-bec, nep-ecm and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/19227/ifn_wp007.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hit:cinwps:7

Access Statistics for this paper

More papers in Working Paper Series from Center for Interfirm Network, Institute of Economic Research, Hitotsubashi University Contact information at EDIRC.
Bibliographic data for series maintained by Digital Resources Section, Hitotsubashi University Library ().