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Zipf distribution in top Chinese firms and an economic explanation

Author

Listed:
  • Zhang, Jianhua
  • Chen, Qinghua
  • Wang, Yougui

Abstract

By analyzing the data of top 500 Chinese firms from the year 2002 to 2007, we reveal that their revenues and ranks obey the Zipf’s law with exponent of 1 for each year. This result confirms the universality of firm size character which has been presented in many other empirical works, since China possesses a unique ideological and political system. We offer an explanation of it based on a simple economic model which takes production and capital accumulation into account.

Suggested Citation

  • Zhang, Jianhua & Chen, Qinghua & Wang, Yougui, 2009. "Zipf distribution in top Chinese firms and an economic explanation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 388(10), pages 2020-2024.
  • Handle: RePEc:eee:phsmap:v:388:y:2009:i:10:p:2020-2024
    DOI: 10.1016/j.physa.2009.01.027
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    Citations

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    Cited by:

    1. Kang, Sang Hoon & Jiang, Zhuhua & Cheong, Chongcheul & Yoon, Seong-Min, 2011. "Changes of firm size distribution: The case of Korea," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(2), pages 319-327.
    2. Segarra, Agustí & Teruel, Mercedes, 2012. "An appraisal of firm size distribution: Does sample size matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 314-328.
    3. Fujimoto, Shouji & Ishikawa, Atushi & Mizuno, Takayuki & Watanabe, Tsutomu, 2011. "A new method for measuring tail exponents of firm size distributions," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 5, pages 1-20.
    4. Heinrich, Torsten & Dai, Shuanping, 2016. "Diversity of firm sizes, complexity, and industry structure in the Chinese economy," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 90-106.
    5. 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.
    6. Pascoal, Rui & Augusto, Mário & Monteiro, A.M., 2016. "Size distribution of Portuguese firms between 2006 and 2012," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 458(C), pages 342-355.
    7. Cortés, Lina M. & Mora-Valencia, Andrés & Perote, Javier, 2017. "Measuring firm size distribution with semi-nonparametric densities," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 485(C), pages 35-47.
    8. Sun, Churen & Zhang, Tao, 2012. "Export, Productivity Pattern, and Firm Size Distribution," MPRA Paper 36742, University Library of Munich, Germany.
    9. Tomson Ogwang, 2011. "Power laws in top wealth distributions: evidence from Canada," Empirical Economics, Springer, vol. 41(2), pages 473-486, October.
    10. repec:spr:jeicoo:v:12:y:2017:i:1:d:10.1007_s11403-015-0152-x is not listed on IDEAS
    11. Guo, Jinzhong & Xu, Qi & Chen, Qinghua & Wang, Yougui, 2013. "Firm size distribution and mobility of the top 500 firms in China, the United States and the world," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(13), pages 2903-2914.
    12. repec:eee:ememar:v:32:y:2017:i:c:p:200-219 is not listed on IDEAS
    13. Hernández-Pérez, R., 2010. "An analogy of the size distribution of business firms with Bose–Einstein statistics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(18), pages 3837-3843.

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