Vidal-Tomás, David;
Ruiz-Buforn, Alba;
Blanco-Arroyo, Omar;
Alfarano, Simone;
(2022)
A Cross-Sectional Analysis of Growth and Profit Rate Distribution: The Spanish Case.
Mathematics
, 10
(6)
, Article 926. 10.3390/math10060926.
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Abstract
We analyse the time evolution of the empirical cross-sectional distribution of firms’ profit and growth rates. In particular, we analyse the conditional properties of the empirical distributions depending on the size of the firms and the business cycle phase. In order to do so, we employ the Laplace distribution as a benchmark, further considering the Subbotin and Asymmetric Exponential Power (AEP hereafter) distributions, to capture the potential asymmetry and leptokurtosis of the empirical distribution. Our results show that the profit rates of large firms are characterised by an asymmetric Laplace distribution with parameters largely independent of the business cycle phase. Small firms, instead, are characterised by the AEP distribution, which accounts for the conditional dependence of distribution on the phase of the business cycle. We observe that the largest firms are more robust to downturns compared to the small firms, given their invariant distributional characteristics during crisis periods.
| Type: | Article |
|---|---|
| Title: | A Cross-Sectional Analysis of Growth and Profit Rate Distribution: The Spanish Case |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.3390/math10060926 |
| Publisher version: | https://doi.org/10.3390/math10060926 |
| Language: | English |
| Additional information: | © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/). |
| Keywords: | profit rates; growth rates; firm size; business cycle; Laplace distribution; asymmetric exponential power distribution |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > Dept of Computer Science |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10177291 |
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