Industry Differences in the Firm Size Distribution
2013 (English)Other (Other academic)
This paper empirically examines industry determinants of the shape of Swedish firm size distributions at the 3-digit (NACE) industry level between 1999-2004 for surviving firms. Recent theoretical studies have begun to develop a better understanding of the causal mechanisms behind the shape of firm size distributions. At the same time there is a growing need for more systematic empirical research. This paper therefore presents a two-stage empirical model, in which the shape parameters of the size distribution are estimated in a rst stage, with rm size measured as number of employees. In a second stage regression analysis, anumber of hypotheses regarding economic variables that may determine the distributional shape are tested. The result from the first step are largely consistent with previous statistical ndings conrming a power law. The main nding, however, is that increases in industry capital and nancial constraint exert a considerable inuence on the size distribution, shaping it over time towards thinner tails, and hence fewer large firms.
Place, publisher, year, edition, pages
Firm size distribution, Zipf's law, Gibrat's law
IdentifiersURN: urn:nbn:se:kth:diva-118329OAI: oai:DiVA.org:kth-118329DiVA: diva2:605655
QC 201302152013-02-142013-02-142013-02-15Bibliographically approved