On the Invariance of Size Distribution of Establishments

Abstract: The thesis examines the establishment size distribution over time and across groups of regions, using data on Swedish establishments during period 1994-2009. The size distribution of establishments is highly skewed and approximates the Pareto distribution. The shape of size distribution is invariant over time and across groups of regions. The distribution of total number of establishments and incumbent distribution are found to rise from the same distribution. Moreover, the invariance of establishment size distribution is highly determined by the invariance of distribution of incumbents, entry and exit distributions. Larger establishments have more chances to survive and higher probability to remain in current size group comparing to smaller ones, whereas higher probabilities of growth would be attached to smaller establishments.