Warren Buffett Value Indicator vs. GDP Size ─ Is the Relationship Superlinear?

Warren Buffett Value Indicator or Buffett Indicator is the ratio of financial capitalization to GDP for a given time for a country. Buffett Indicator is used as a buy or sell signal to many investors around the world. This paper attempts to determine whether the scaling relationship may exist for Buffett indicator among different groups of countries. If such scaling relationship exists, the traditional use of Buffett indicator can be refined to seek better candidate countries for investment. Our analysis indicates that superlinear scaling relationship exists for total of 34 countries during the period of 1997 to 2014. Superlinear relationship exists also for the subgroups of 12 and 13 countries, but not for the subgroup of 9 countries. Implication from our findings for international investment will be discussed