The exponential age distribution and the Pareto firm size distribution

Research, Preprint English OPEN
Coad, Alex;
(2008)
  • Publisher: Universität Jena und Max-Planck-Institut für Ökonomik Jena
  • Subject: Gibrat's law | Pareto distribution | Publikationsanalyse | L20 | Zipf Law | L25 | Statistische Verteilung | Unternehmensentwicklung | firm growth | Firm size distribution, Firm growth, Gibrat's Law, Pareto distribution, Zipf Law | Firm size distribution | Unternehmenswachstum | Betriebsgrößenstruktur | Theorie
    • ddc: ddc:330
      jel: jel:L20 | jel:L25

Recent work drawing on data for large and small firms has shown a Pareto distribution of firm size. We mix a Gibrat-type growth process among incumbents with an exponential distribution of firm's age, to obtain the empirical Pareto distribution.
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