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The exponential age distribution and the Pareto firm size distribution

Author

Listed:
  • Alex Coad

    (Max Planck Institute of Economics, Jena, Germany)

Abstract

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.

Suggested Citation

  • Alex Coad, 2008. "The exponential age distribution and the Pareto firm size distribution," Jena Economics Research Papers 2008-072, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2008-072
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    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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