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On the distributional properties of size, profit and growth of Icelandic firms

  • Einar Jón Erlingsson

    ()

    (Reykjavik University)

  • Simone Alfarano

    ()

    (Universitat Jaume I)

  • Marco Raberto

    ()

    (DOGE.I, Università di Genova)

  • Hlynur Stefánssonn

    ()

    (Reykjavik University)

In 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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Paper provided by Economics Department, Universitat Jaume I, Castellón (Spain) in its series Working Papers with number 2012/01.

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Length: 15 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:jau:wpaper:2012/01
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  1. Cincotti, Silvano & Raberto, Marco & Teglio, Andrea, 2010. "Credit money and macroeconomic instability in the agent-based model and simulator Eurace," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 4, pages 1-32.
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  15. de Wit, Gerrit, 2005. "Firm size distributions: An overview of steady-state distributions resulting from firm dynamics models," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 423-450, June.
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