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Scale-free phenomenon in industries in China

Author

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  • Tang, Da-Hai
  • Chen, Bo-Kui
  • Gao, Ya-Chun
  • Wang, Bing-Hong

Abstract

In this paper, we investigate the data of industries in China and find that the frequency distributions of fixed assets and fixed-assets’ investment of industries obey power laws. We show that these power-law modes can be explained by the rules of the Simon Model, rather than the existing investment theories such as the classical investment theory or acceleration principle. Moreover, the mechanism of the investment distribution may be similar to the forest-fire model of self-organizing criticality. By introducing the complex system methods, this research changes the traditional opinion of the investment and gains some meaningful understanding in the dynamics of industries and the economic cycle.

Suggested Citation

  • Tang, Da-Hai & Chen, Bo-Kui & Gao, Ya-Chun & Wang, Bing-Hong, 2013. "Scale-free phenomenon in industries in China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(23), pages 5914-5919.
    • Handle: RePEc:eee:phsmap:v:392:y:2013:i:23:p:5914-5919
    DOI: 10.1016/j.physa.2013.07.044
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