Firm size and economic concentration: An analysis from a lognormal expansion

Lina Cortés, Juan M Lozada and Javier Perote

PLOS ONE, 2021, vol. 16, issue 7, 1-21

Abstract: This paper studies the distribution of the firm size for the Colombian economy showing evidence against the Gibrat’s law, which assumes a stable lognormal distribution. On the contrary, we propose a lognormal expansion that captures deviations from the lognormal distribution with additional terms that allow a better fit at the upper distribution tail, which is overestimated according to the lognormal distribution. As a consequence, concentration indexes should be addressed consistently with the lognormal expansion. Through a dynamic panel data approach, we also show that firm growth is persistent and highly dependent on firm characteristics, including size, age, and leverage −these results neglect Gibrat’s law for the Colombian case.

Date: 2021
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Working Paper: Firm size and economic concentration: An analysis from lognormal expansion (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0254487

DOI: 10.1371/journal.pone.0254487

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