Re-examination of the Size Distribution of Firms
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In this paper we address the question of the size distribution of firms. To this aim, we use the Bloomberg database comprising multinational firms within the years 1995–2003, and analyze the data of the sales and the total assets of the separate financial statements of the Japanese and the US companies, and make a comparison of the size distributions between the Japanese companies and the US companies. We find that (i) the size distribution of the US firms is approximately log-normal, in agreement with Gibrat's observation (Gibrat, 1931), and in contrast (ii) the size distribution of the Japanese firms is clearly not log-normal, and the upper tail of the size distribution follows the Pareto law. It agrees with the predictions of the Simon model (Simon, 1955).
- Evolutionary and Institutional Economics Review
Evolutionary and Institutional Economics Review 2(2), 183-198, 2006
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