On the Evolution of the Firm Size Distribution: Facts and Theory
Luis Cabral () and
José Mata ()
No 3045, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Using a comprehensive data set of Portuguese manufacturing firms, we show that the firm size distribution is significantly right-skewed, evolving over time toward a log-normal distribution. We also show that selection accounts for very little of this evolution. Instead, we propose a simple theory based on financing constraint. A calibrated version of our model does a good job at explaining the evolution of the firm size distribution.
Keywords: financing constraints; firm growth; firm size distribution (search for similar items in EconPapers)
JEL-codes: L00 (search for similar items in EconPapers)
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Journal Article: On the Evolution of the Firm Size Distribution: Facts and Theory (2003)
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