dorsal/arxiv
View SchemaA transactional theory of fluctuations in company size
| Authors | A. O. Schweiger, S. V. Buldyrev, H. E. Stanley |
|---|---|
| Categories | |
| ArXiv ID | physics/0703023 |
| URL | https://arxiv.org/abs/physics/0703023 |
Abstract
Detailed empirical studies of publicly traded business firms have established that the standard deviation of annual sales growth rates decreases with increasing firm sales as a power law, and that the sales growth distribution is non-Gaussian with slowly decaying tails. To explain these empirical facts, a theory is developed that incorporates both the fluctuations of a single firm's sales and the statistical differences among many firms. The theory reproduces both the scaling in the standard deviation and the non-Gaussian distribution of growth rates. Earlier models reproduce the same empirical features by splitting firms into somewhat ambiguous subunits; by decomposing total sales into individual transactions, this ambiguity is removed. The theory yields verifiable predictions and accommodates any form of business organization within a firm. Furthermore, because transactions are fundamental to economic activity at all scales, the theory can be extended to all levels of the economy, from individual products to multinational corporations.
{
"annotation_id": "bec61fa7-f260-4ce2-999e-1466c4748bb6",
"date_created": "2026-03-02T18:01:17.758000Z",
"date_modified": "2026-03-02T18:01:17.758000Z",
"file_hash": "cd5d711dfa77a6ce515fd57a572155a1a4bb5b4230cf8db58cbdff5f54965f2d",
"private": false,
"record": {
"abstract": "Detailed empirical studies of publicly traded business firms have established\nthat the standard deviation of annual sales growth rates decreases with\nincreasing firm sales as a power law, and that the sales growth distribution is\nnon-Gaussian with slowly decaying tails. To explain these empirical facts, a\ntheory is developed that incorporates both the fluctuations of a single firm\u0027s\nsales and the statistical differences among many firms. The theory reproduces\nboth the scaling in the standard deviation and the non-Gaussian distribution of\ngrowth rates. Earlier models reproduce the same empirical features by splitting\nfirms into somewhat ambiguous subunits; by decomposing total sales into\nindividual transactions, this ambiguity is removed. The theory yields\nverifiable predictions and accommodates any form of business organization\nwithin a firm. Furthermore, because transactions are fundamental to economic\nactivity at all scales, the theory can be extended to all levels of the\neconomy, from individual products to multinational corporations.",
"arxiv_id": "physics/0703023",
"authors": [
"A. O. Schweiger",
"S. V. Buldyrev",
"H. E. Stanley"
],
"categories": [
"physics.soc-ph",
"physics.data-an",
"q-fin.GN"
],
"title": "A transactional theory of fluctuations in company size",
"url": "https://arxiv.org/abs/physics/0703023"
},
"schema_id": "dorsal/arxiv",
"source": {
"execution_id": "c18edf40-fdcf-4419-8a13-393cb4bffb8e",
"id": "arXiv Dataset IDs",
"type": "Model",
"variant": "snapshot-2026-03-01",
"version": "0.1.0"
},
"user_id": 1000002
}