fbpx

Mikhailย Pomazanov – National Research University Higher School of Economics, st. Myasnitskaya 20, 101000 Moscow, Russia

Nadezhdaย Loginova – National Research University Higher School of Economics, st. Myasnitskaya 20, 101000 Moscow, Russia

Keywords:ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  Concentration;
Herfindahlโ€“Hirschman index;
Sustainable development;
Corporation;
National scale

DOI: https://doi.org/10.31410/ERAZ.S.P.2023.51

Abstract: The high concentration of assets and revenues of corporations or large enterprises on a national scale represents a risk that can hinder sustainยญable development. For instance, in terms of a bankโ€™s loan portfolio concentraยญtion risk is so crucial that it is a separate significant type of risk in addition to credit risk. In the proposed article a corporate sector concentration index was constructed for countries for which revenue data of TOP-50 or TOP-100 largยญest enterprises is accessible from open sources. The index is based on the reยญvealed pattern of decrease in the volume indicator of the company (revenue, assets) of the order of 1โ„n^z, where n is the serial number of the companies ranked in descending order of the indicator, and z is a country-specific paยญrameter. Based on all possibly available open statistics, providing data on 30 countries, the consistency of the statistical hypothesis about the dependence of the corporate sector concentration index on the Human Development Inยญdex and Ease of doing business is substantiated.

9th International Scientific ERAZ Conference โ€“ ERAZ 2023 โ€“ Selected Papers: KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, hybrid โ€“ online, virtually and in person, Prague, Czech Republic, June 1, 2023

ERAZ Selected Papers published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ERAZ conference partners: Faculty of Logistics, University of Maribor, Maribor (Slovenia); University of National and World Economy โ€“ UNWE, Sofia (Bulgaria); Center for Political Research and Documentation (KEPET), Research Laboratory of the Department of Political Science of University of Crete (Greece); Institute of Public Finance โ€“ Zagreb (Croatia); Faculty of Tourism and Hospitality Ohrid, University of St. Kliment Ohridski from Bitola (North Macedonia)

ERAZ Conference 2023 Selected Papers: ISBN 978-86-80194-73-8, ISSN 2683-5568, DOI: https://doi.org/10.31410/ERAZ.S.P.2023

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License (https://creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission.ย 

Suggested citation

Pomazanov, M., & Loginova, N. (2023). Macroeconomic Concentration Index of Corporate Sector Companies. In V. Bevanda (Ed.), ERAZ Conference – Knowlegde Based Sustainable Development: Vol 9. Selected Papers (pp. 51-62). Association of Economists and Managers of the Balkans. https://doi.org/10.31410/ERAZ.S.P.2023.51

References

Akhundjanov, S. B., & Chamberlain, L. (2019). The power-law distribution of agricultural land size. Journal of Applied Statistics, 46(16), 3044-3056. https://doi.org/10.1080/02664763.2019.1624695ย 

Axtell, R. L. (2001). Zipf Distribution of U.S. Firm Sizes. Science, 293(5536), 1818-1820. https://doi.org/10.1126/science.1062081ย 

Balthrop, A. (2016). Power laws in oil and natural gas production. Empirical Economics, 51(4), 1521-1539. https://doi.org/10.1007/s00181-015-1054-4ย 

Benhabib, J., Bisin, A., & Zhu, S. (2011). The distribution of wealth and fiscal policy in economies with finitely lived agents. Econometrica, 79(1), 123โ€“157. https://doi.org/10.3982/ECTA8416ย 

Berliant, M., & Watanabe, H. (2015). Explaining the size distribution of cities: Extreme econoยญmies. Quantitative Economics, 6(1), 153-187. https://doi.org/10.3982/qe42ย 

Candelpergher, B., & Coppo, M.-A. (2020). Laurent expansion of harmonic zeta functions. Jourยญnal of Mathematical Analysis and Applications, 491(1), 124309. https://doi.org/10.1016/j.jmaa.2020.124309ย ย 

Champernowne, D. G. (1953). A Model of Income Distribution. The Economic Journal, 63(250), 318. https://doi.org/10.2307/2227127ย 

Clauset, A., Shalizi, C. R., & Newman, M. E. J. (2009). Power-Law Distributions in Empirical Data. SIAM Review, 51(4), 661-703. https://doi.org/10.1137/070710111ย 

Deng, W., & Wang, J. (2023). The Euler-Riemann ฮถ function and the estimation of the power-law exponent. Physica A: Statistical Mechanics and its Applications, 624, 128940. https://doi.org/10.1016/j.physa.2023.128940ย ย 

Devadoss, S., Luckstead, J., Danforth, D., & Akhundjanov, S. (2016). The power law distribution for lower tail cities in India. Physica A: Statistical Mechanics and its Applications, 442, 193- 196. https://doi.org/10.1016/j.physa.2015.09.016ย 

EPI. (2022). Results Overview. https://epi.yale.edu/epi-results/2022/component/epiย 

Gabaix, X. (1999). Zipfโ€™s Law for Cities: An Explanation. The Quarterly Journal of Economics, 114(3), 739-767. https://doi.org/10.1162/003355399556133ย 

Gini, C. (1921). Measurement of Inequality of Incomes. The Economic Journal, 31(121), 124. https://doi.org/10.2307/2223319ย 

Gordy, M. B., & Luetkebohmert, E. (2007). Granularity Adjustment for Basel II. SSRN Electronยญic Journal. https://doi.org/10.2139/ssrn.2793986ย 

HDI. (2022). HUMAN DEVELOPMENT INSIGHTS. Retrieved from https://hdr.undp.org/data-center/country-insights#/ranksย 

Herfindahl, O. C. (1950). Concentration in the steel industry [Doctoral dissertation, Columbia University].

Ioannides, Y. M., & Overman, H. G. (2003). Zipfโ€™s law for cities: an empirical examinaยญtion. Regional Science and Urban Economics, 33(2), 127-137. https://doi.org/10.1016/s0166-0462(02)00006-6ย ย 

Klass, O. S., Biham, O., Levy, M., Malcai, O., & Solomon, S. (2006). The Forbes 400 and the Pareto wealth distribution. Economics Letters, 90(2), 290-295. https://doi.org/10.1016/j.econlet.2005.08.020ย ย 

Knack, S., & Keefer, P. (1995). Institutions and Economic Performance: Cross-Country Tests using Alternative Institutional Measures. Economics & Politics, 7(3), 207-227. https://doi.org/10.1111/j.1468-0343.1995.tb00111.xย ย 

Krugman, P. (1996). The self-organizing economy. Choice Reviews Online, 33(09), 33-5214-33- 5214. https://doi.org/10.5860/choice.33-5214

Luttmer, E. G. J. (2007). Selection, Growth, and the Size Distribution of Firms. The Quarterly Journal of Economics, 122(3), 1103-1144. https://doi.org/10.1162/qjec.122.3.1103ย 

Mauro, P. (1995). Corruption and Growth. The Quarterly Journal of Economics, 110(3), 681-712. https://doi.org/10.2307/2946696ย 

Nickell, S., Nunziata, L., & Ochel, W. (2005). Unemployment in the OECD Since the 1960s. What Do We Know? The Economic Journal, 115(500), 1-27. https://doi.org/10.1111/j.1468-0297.2004.00958.xย 

Pareto, V. (1896). Cours dโ€™Economie Politique Professe a lโ€™Universite de Lausanne, vol. I. Paris: F. Rouge.

RAEX-RR. (1995). Rating of the largest companies in Russia by product sales volume. Retrieved from https://raex-rr.com/largest/RAEX-600/biggest_companies/1995/ย 

RAEX-RR. (2021). Rating of the largest companies in Russia RAEX-600. Retrieved from https://raex-rr.com/largest/RAEX-600/biggest_companies/2021/ย ย 

Singh, S. K., & Maddala, G. S. (1976). A Function for Size Distribution of Incomes. Econometriยญca, 44(5), 963. https://doi.org/10.2307/1911538ย 

Stanley, M. H. R., Buldyrev, S. V., Havlin, S., Mantegna, R. N., Salinger, M. A., & Eugene Stanยญley, H. (1995). Zipf plots and the size distribution of firms. Economics Letters, 49(4), 453-457. https://doi.org/10.1016/0165-1765(95)00696-dย 

Statement of Policy. (2021). Statement of Policy The PRAโ€™s methodologies for setting Pillar 2 capital. https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/stateยญment-of-policy/2021/the-pras-methodologies-for-setting-pillar-2a-capital-jan-2022.pdfย 

Statista. (2023). https://www.statista.com. For example, for Egypt https://www.statista.com/study/89929/top-100-companies-egypt/ย 

Titchmarsh, E. C. (1986). The Theory of the Riemann Zeta-Function. 2nd Edition, Edited and with a Preface by Heath-Brown, D. R., The Clarendon Press, Oxford University Press, Oxford.

Toda, A. A. (2012). The double power law in income distribution: Explanations and evidence. Journal of Economic Behavior & Organization, 84(1), 364-381. https://doi.org/10.1016/j.jebo.2012.04.012ย 

Toda, A. A. (2017). A note on the size distribution of consumption: more double Pareto than logยญnormal. Macroeconomic Dynamics, 21(6), 1508โ€“1518. http://dx.doi.org/10.2139/ssrn.2540741ย 

Toda, A. A., & Walsh, K. (2015). The Double Power Law in Consumption and Implications for Testing Euler Equations. Journal of Political Economy, 123(5), 1177-1200. https://doi.org/10.1086/682729ย ย 

Wold, H. O. A., & Whittle, P. (1957). A Model Explaining the Pareto Distribution of Wealth. Econometrica, 25(4), 591. https://doi.org/10.2307/1905385ย 

World Bank Database. (2021). https://data.worldbank.org/indicatorย