On the distributional properties of size, pro fit and growth of Icelandic firms
AbstractIn this paper, we analyze the distributional properties of the balance sheets of Icelandic firms by performing an empirical analysis of total assets, profit rates and growth rates using a data set of 2818 Icelandic firms during the period 2000-2009. We find that the firms size measure, i.e. total assets, have the same heavy tail characteristics as various studies have shown, e.g. for U.S. and Italian firms. The heavy tail nature of the total assets distribution seems to be robust w.r.t. a boom-bust cycle of the economy as well as special characteristics of Icelandic firms, e.g. their relatively small size and private ownership. Another important finding is that the profit rates, or return on assets, of Icelandic firms follow a Laplace like distribution similar to U.S. firms. Additionally, we identified deviations from the distributional regularities, namely the power law behavior of firms' size and laplacian distributions of growth and profit rates, during the booming period of the economy 2005-2007.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 35857.
Date of creation: Jan 2012
Date of revision:
Firm size; Profit rates; Growth rates; Power law; Laplace distribution; Icelandic firms;
Other versions of this item:
- Einar Erlingsson & Simone Alfarano & Marco Raberto & Hlynur Stefánsson, 2013. "On the distributional properties of size, profit and growth of Icelandic firms," Journal of Economic Interaction and Coordination, Springer, vol. 8(1), pages 57-74, April.
- Einar Jón Erlingsson & Simone Alfarano & Marco Raberto & Hlynur Stefánssonn, 2012. "On the distributional properties of size, profit and growth of Icelandic firms," Working Papers 2012/01, Economics Department, Universitat Jaume I, Castellón (Spain).
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
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