We study the effect of size-based regulation on an economic system. A multiple-trait model of self-organized criticality is used to simulate the economic system. The major difference of this work from previous studies is that firm’s fitness is not characterized by a single number but by M traits. Each trait represents one aspect of the competitiveness of the firm, and firm’s size is one of thes...

We examine the announcement period stock returns for 179 over-the-counter (OTC) firms that issue common stock to reduce nonconvertible debt. We find that small OTC firms experience returns that are significantly more negative than large OTC firms. Regression tests reveal that firm size is a significant factor in accounting for stock returns. Other tests establish firm size as a dominant effect....