Distribution and Fluctuation of Firm Size in the Long-Run

W. Souma, H. Aoyama and L. Gruene

No 92, Computing in Economics and Finance 2004 from Society for Computational Economics

Abstract: The paper studies empirically and analytically growth and fluctuation of firm size distribution. An empirical analysis is carried out on several data sets on firm size, with emphasis on one-time distribution as well as growth-rate probability distribution. Two well-known scaling laws, Pareto's law and Gibrat's law, are discussed. Some theoretical discussion on their relationship is presented. We also discuss to what extent there may exist economic mechanisms that produce an unequal firm size distribution in the long run. The mechanisms we study have been known in the economic literature since long. Yet, they have not been studied in the context of a dynamic decision problem of the firm. We allow for heterogeneity of firms with respect to certain characteristics. We then show that there are mechanisms at work which may generate a twin-peaked distribution of firm size in the long-run, which will then be tested empirically

Keywords: Firm size; Pareto's law; Gibrat's law (search for similar items in EconPapers)
JEL-codes: C61 C63 L10 L11 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-com
References: Add references at CitEc
Citations:

Downloads: (external link)
http://repec.org/sce2004/up.2846.1077251103.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf4:92

Access Statistics for this paper

More papers in Computing in Economics and Finance 2004 from Society for Computational Economics Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().