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Scaling invariant distributions of firms’ exit in OECD countries

Author

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  • Guilmi, Corrado Di
  • Gallegati, Mauro
  • Ormerod, Paul

Abstract

Self-similar models are largely used to describe the extinction rate of biological species. In this paper we analyse the extinction rate of firms in eight OECD countries. Firms are classified by industrial sectors and sizes. We find that while a power-law distribution with exponent close to 2 fits the extinction rate very well by sector, a Weibull distribution is more appropriate if one analyses the firms’ size.

Suggested Citation

  • Guilmi, Corrado Di & Gallegati, Mauro & Ormerod, Paul, 2004. "Scaling invariant distributions of firms’ exit in OECD countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 334(1), pages 267-273.
    • Handle: RePEc:eee:phsmap:v:334:y:2004:i:1:p:267-273
    DOI: 10.1016/j.physa.2003.10.063
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    3. Ormerod, Paul, 2015. "The economics of radical uncertainty," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-20.
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    6. Ma, Qi & Chen, Yongwang & Tong, Hui & Di, Zengru, 2008. "Production, depreciation and the size distribution of firms," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(13), pages 3209-3217.
    7. Bridget Rosewell & Paul Ormerod, 2004. "How much can firms know?," Computing in Economics and Finance 2004 44, Society for Computational Economics.
    8. Caiani, Alessandro & Godin, Antoine & Caverzasi, Eugenio & Gallegati, Mauro & Kinsella, Stephen & Stiglitz, Joseph E., 2016. "Agent based-stock flow consistent macroeconomics: Towards a benchmark model," Journal of Economic Dynamics and Control, Elsevier, vol. 69(C), pages 375-408.
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    10. Dahui, Wang & Li, Zhou & Zengru, Di, 2006. "Bipartite producer–consumer networks and the size distribution of firms," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 363(2), pages 359-366.
    11. Gao, Baojun & Chan, Wai Kin (Victor) & Li, Hongyi, 2015. "On the increasing inequality in size distribution of China's listed companies," China Economic Review, Elsevier, vol. 36(C), pages 25-41.
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    13. Junho Na & Jeong-dong Lee & Chulwoo Baek, 2017. "Is the service sector different in size heterogeneity?," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(1), pages 95-120, April.
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    15. Wang Dahui & Zhou Li & Di Zengru, 2005. "Bipartite Producer-Consumer Networks and the Size Distribution of Firms," Papers physics/0507163, arXiv.org.

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