On the Size Distribution of Business Firms
6 Pages Posted: 19 Dec 2007
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
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