Zipf Distribution of U.S. Firm Sizes

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Science  07 Sep 2001:
Vol. 293, Issue 5536, pp. 1818-1820
DOI: 10.1126/science.1062081

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Analyses of firm sizes have historically used data that included limited samples of small firms, data typically described by lognormal distributions. Using data on the entire population of tax-paying firms in the United States, I show here that the Zipf distribution characterizes firm sizes: the probability a firm is larger than sizes is inversely proportional to s. These results hold for data from multiple years and for various definitions of firm size.

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