Firm-Size Distribution in Poland: Is Power Law Applicable?
This article focuses on the existence of power laws in the firm-size distribution in Poland. Specifically, we empirically test whether the size distribution of companies in Poland has the characteristics of Zipf ’s law, a special case of power law observed in many different contexts in empirical eco...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Collegium of Economic Analysis, SGH Warsaw School of Economics
2021-06-01
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| Series: | Gospodarka Narodowa. The Polish Journal of Economics |
| Subjects: | |
| Online Access: | https://gnpje.sgh.waw.pl/Firm-Size-Distribution-in-Poland-Is-Power-Law-Applicable-,134627,0,2.html |
| Summary: | This article focuses on the existence of power laws in the firm-size distribution
in Poland. Specifically, we empirically test whether the size distribution of companies
in Poland has the characteristics of Zipf ’s law, a special case of power law observed
in many different contexts in empirical economic literature. Our analysis uses 2019 data
on the 2,000 largest companies in Poland as ranked by the Rzeczpospolita daily newspaper
in its “Lista 2000” (Top 2,000 List). We reviewed theoretical mechanisms generating
power laws and used several estimators of the power-law exponent in our empirical analysis.
Our results confirm statistically significant deviations from Zipf ’s law in the firm-size
distribution in Poland. We found evidence that the power law cannot satisfactorily approximate
the sales-based distribution of firms. |
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| ISSN: | 0867-0005 2300-5238 |