Firm size distributions

Empirical firm size distributions are the cumulated result of underlying firm dynamics involving entry of new firms and growth, decline, and exits of incumbent firms. In this paper we give an overview of firm size distributions that result as steady states from models differing in the way these firm...

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Bibliographic Details
Published inInternational journal of industrial organization Vol. 23; no. 5; pp. 423 - 450
Main Author de Wit, Gerrit
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.06.2005
Subjects
Firm dynamics
Firm size distributions
Steady state
L11
Firm size distributions
Steady state
Firm dynamics
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Summary:Empirical firm size distributions are the cumulated result of underlying firm dynamics involving entry of new firms and growth, decline, and exits of incumbent firms. In this paper we give an overview of firm size distributions that result as steady states from models differing in the way these firm dynamics are modelled. In the process we (i) derive common results and explain seemingly contradictory results, (ii) propose new functional forms to describe firm size distributions, (iii) give insight in the interrelationships between the distributions in terms of underlying firm dynamics, (iv) give possible firm dynamical interpretations of the parameters of the distributions, and (v) analyse to which extent the steady-state approach is able to explain the shape of firm size distributions that are encountered in practice.
ISSN:0167-7187
DOI:10.1016/j.ijindorg.2005.01.012