Technology and the size distribution of firms: Evidence from Dutch manufacturing

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Abstract

Empirical studies have shown that the size distribution of firms can be described as a Pareto distribution. However, these studies have focused on large firms and aggregate statistics. Little attention has been placed on the role of technology in shaping firm size distributions. Using a comprehensive dataset of manufacturing firms and the Community Innovation Survey from the Netherlands, the paper investigates the relationship between firm size and technology. It shows that technological factors shape the distribution of firm size, suggesting that the Pareto law is not an invariant property and that technology can constrain the "self-organising" character of industrial economies.
Original languageEnglish
Pages (from-to)303-328
Number of pages26
JournalReview of Industrial Organization
Volume27
Issue number4
DOIs
Publication statusPublished - 1 Dec 2005

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Keywords

  • Firm size
  • Innovation

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