On the Evolution of Firm Size Distributions

Posted: 15 May 2008

Abstract

We study the impact of financial constraints on firm size distribution (FSD). We find that financially constrained firms, identified using various proxies, are smaller than the others (their FSD is more skewed to the right). However, among OECD countries, the FSD of nonconstrained firms virtually overlaps that of the entire sample, suggesting that the overall impact of financial constraints on the FSD is modest. The difference is more pronounced in our sample of firms from non-OECD countries. We conclude that financial constraints cannot be considered the main determinant of the FSD evolution in developed economies.

Keywords: Size Distribution of Firms, credit rationing

JEL Classification: L11, L25

Suggested Citation

Angelini, Paolo and Generale, Andrea, On the Evolution of Firm Size Distributions. American Economic Review, Vol. 98, No. 1, pp. 426-438, 2008. Available at SSRN: https://ssrn.com/abstract=1133514

Paolo Angelini (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Andrea Generale

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

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