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Firm-Size Distribution in Poland: Is Power Law Applicable?

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  • Piotr Gabrielczak
  • Tomasz Serwach

Abstract

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.

Suggested Citation

  • Piotr Gabrielczak & Tomasz Serwach, 2021. "Firm-Size Distribution in Poland: Is Power Law Applicable?," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 31-49.
    • Handle: RePEc:sgh:gosnar:y:2021:i:2:p:31-49
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    More about this item

    Keywords

    power law; Zipf's law; firm-size distribution; scaling;
    All these keywords.

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • D39 - Microeconomics - - Distribution - - - Other
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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