Fluctuation of firm size in the long-run and bimodal distribution

  • We study empirically and analytically growth and fluctuation of firm size distribution. An empirical analysis is carried out on a US data set on firm size, with emphasis on one-time distribution as well as growth-rate probability distribution. Both Pareto's law and Gibrat's law are often used to study firm size distribution. Their theoretical relationship is discussed, and it is shown how they are complementable with a bimodal distribution of firm size. We introduce economic mechanisms that suggest a bimodal distribution of firm size in the long run. The mechanisms we study have been known in the economic literature since long. Yet, they have not been studied in the context of a dynamic decision problem of the firm. Allowing for these mechanism thus will give rise to heterogeneity of firms with respect to certain characteristics. We then present different types of tests on US data on firm size which indicate a bimodal distribution of firm size.

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Author:Hideaki Aoyama, Lars Grüne, Willi Semmler, Yoshi Fujiwara, Wataru Souma
URN:urn:nbn:de:hebis:30:3-505039
DOI:https://doi.org/10.1155/2011/269239
ISSN:1687-9147
ISSN:1687-9155
Parent Title (English):Advances in operations research
Publisher:Hindawi
Place of publication:New York, NY
Contributor(s):Walter J. Gutjahr
Document Type:Article
Language:English
Year of Completion:2011
Year of first Publication:2011
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2019/07/29
Volume:2011
Issue:Art. 269239
Page Number:22
First Page:1
Last Page:21
Note:
Copyright © 2011 Hideaki Aoyama et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
HeBIS-PPN:452196825
Institutes:Informatik und Mathematik / Mathematik
Dewey Decimal Classification:5 Naturwissenschaften und Mathematik / 51 Mathematik / 510 Mathematik
Sammlungen:Universitätspublikationen
Licence (German):License LogoCreative Commons - Namensnennung 3.0