On the Size Distribution of Business Firms

6 Pages Posted: 19 Dec 2007

See all articles by Jakub Growiec

Jakub Growiec

National Bank of Poland; Warsaw School of Economics (SGH)

Fabio Pammolli

Polytechnic University of Milan - Department of Management, Economics and Industrial Engineering; CERM Foundation

Massimo Riccaboni

KU Leuven - Department of Managerial Economics, Strategy, and Innovation; IMT Institute for Advanced Studies

H. Eugene Stanley

Boston University - Center for Polymer Studies

Abstract

The size distribution of business firms is explained using number and size of firms' constituent components. It is a lognormal distribution multiplied by a stretching factor which can lead to a Pareto upper tail. This result is confirmed empirically.

Keywords: Firm size distribution, Gibrat law, Pareto distribution, Lognormal distribution, Tail behavior

JEL Classification: L11, L65

Suggested Citation

Growiec, Jakub and Pammolli, Fabio and Riccaboni, Massimo and Stanley, H. Eugene, On the Size Distribution of Business Firms. Economics Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1008446

Jakub Growiec

National Bank of Poland ( email )

00-919 Warsaw
Poland

Warsaw School of Economics (SGH)

aleja Niepodleglosci 162
PL-Warsaw, 02-554
Poland

Fabio Pammolli

Polytechnic University of Milan - Department of Management, Economics and Industrial Engineering ( email )

Via Lambruschini 4C - building 26/A
Milano, 20156
Italy

CERM Foundation ( email )

Via Fiorentina, 1
Siena, Siena 53100
Italy

HOME PAGE: http://www.cermlab.it

Massimo Riccaboni (Contact Author)

KU Leuven - Department of Managerial Economics, Strategy, and Innovation ( email )

Naamsestraat 69 bus 3500
Leuven, 3000
Belgium

IMT Institute for Advanced Studies ( email )

Complesso San Micheletto
Lucca, 55100
Italy

H. Eugene Stanley

Boston University - Center for Polymer Studies ( email )

Boston, MA 02215
United States

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