eprintid: 3853
rev_number: 7
eprint_status: archive
userid: 69
dir: disk0/00/00/38/53
datestamp: 2017-12-28 11:09:29
lastmod: 2017-12-28 11:09:29
status_changed: 2017-12-28 11:09:29
type: article
succeeds: 2247
metadata_visibility: show
creators_name: Bee, Marco
creators_name: Riccaboni, Massimo
creators_name: Schiavo, Stefano
creators_id: 
creators_id: massimo.riccaboni@imtlucca.it
creators_id: 
title: Where Gibrat meets Zipf: scale and scope of French firms
ispublished: pub
subjects: HB
subjects: HD
divisions: EIC
full_text_status: none
monograph_type: working_paper
keywords: Firm size distribution; multi-product firms; Pareto; Zipf's law; lognormal    -    JEL Codes: C46, L11, L25
abstract: The proper characterization of the size distribution and growth of firms represents an important issue in economics and business. We use the Maximum Entropy approach to assess the plausibility of the assumption that firm size follows Lognormal or Pareto distributions, which underlies most recent works on the subject. A comprehensive dataset covering the universe of French firms allows us to draw two major conclusions. First, the Pareto hypothesis for the whole distribution should be rejected. Second, by discriminating across firms based on the number of products sold and markets served, we find that, within the class of multi-product companies active in multiple markets, the distribution converges to a Zipf’s law. Conversely, Lognormal distribution is a good benchmark for small single-product firms. The size distribution of firms largely depends on firms’ diversification patterns.
date: 2017
date_type: published
publication: Physica A: Statistical Mechanics and its Applications
volume: 481
publisher: Elsevier
pagerange: 265-275
pages: 23
id_number: doi: 10.1016/j.physa.2017.04.012
institution: IMT Institute for Advanced Studies Lucca
refereed: TRUE
issn: 0378-4371
official_url: https://doi.org/10.1016/j.physa.2017.04.012
citation:   Bee, Marco and Riccaboni, Massimo and Schiavo, Stefano  Where Gibrat meets Zipf: scale and scope of French firms.  Physica A: Statistical Mechanics and its Applications, 481.  pp. 265-275.  ISSN 0378-4371      (2017)