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Phys. Rev. Lett. 81, 3275 - 3278 (1998)

Universal Features in the Growth Dynamics of Complex Organizations

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Youngki Lee1, Luís A. Nunes Amaral1,2, David Canning3, Martin Meyer1, and H. Eugene Stanley1
1Center for Polymer Studies and Department of Physics, Boston University, Boston, Massachusetts 02215
2Department of Physics, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139
3Harvard Institute for International Development, Harvard University, Cambridge, Massachusetts 02136

Featured in Physics News Update Received 3 April 1998; revised 9 June 1998

We analyze the fluctuations in the gross domestic product (GDP) of 152 countries for the period 1950–1992. We find that (i) the distribution of annual growth rates for countries of a given GDP decays with “fatter” tails than for a Gaussian, and (ii) the width of the distribution scales as a power law of GDP with a scaling exponent β≈0.15. Both findings are in surprising agreement with results on firm growth. These results are consistent with the hypothesis that the evolution of organizations with complex structure is governed by similar growth mechanisms.


©1998 The American Physical Society

URL: http://link.aps.org/doi/10.1103/PhysRevLett.81.3275
DOI: 10.1103/PhysRevLett.81.3275
PACS: 02.50.Ey, 01.75.+m, 05.40.+j, 05.45.+b

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