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Power Law in Firms Bankruptcy

Byoung Hee Hong·Kyoung Eun Lee·Jae Woo Lee
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Abstract

We consider the scaling behaviors for fluctuations of the number of Korean firms bankrupted in the period from August 1 2002 to October 28 2003. We observe a power law for the distribution of the number of the bankrupted firms. The Pareto exponent is close to unity. We also consider the daily increments of the number of firms bankrupted. The probability distribution of the daily increments for the firms bankrupted follows the Gaussian distribution in central part and has a fat tail. The tail parts of the probability distribution of the daily increments for the firms bankrupted follow a power law.

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Byoung Hee Hong, Kyoung Eun Lee, Jae Woo Lee. 2007-01-26. Power Law in Firms Bankruptcy. https://doi.org/10.1016/j.physleta.2006.09.034

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