2003 Fiscal Year Final Research Report Summary
Theoretical and Empirical Research on the Relations among the Size Distribution of Firms, Economies of Scale and Economic Growth
| Project/Area Number |
13630010
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
経済理論
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| Research Institution | Kobe University |
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Principal Investigator |
ADACHI Hideyuki Kobe University, Graduate School of Economics, Professor, 大学院・経済学研究科, 教授 (70030666)
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| Co-Investigator(Kenkyū-buntansha) |
YANAGAWA Takashi Kobe University, Graduate School of Economics, Professor, 大学院・経済学研究科, 教授 (60247616)
HAGIWARA Taiji Kobe University, Graduate School of Economics, Professor, 大学院・経済学研究科, 教授 (40172837)
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| Project Period (FY) |
2001 – 2003
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| Keywords | the size distribution of firms / the Pareto distribution / economies of scale / the law of proportionate effect / economic growth / income distribution / learning by doing / productivity difference of firms by scale |
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| Research Abstract |
This research was carried out from 2001 to 2003 (fiscal year). It concerns about the size distribution of firms. The size distribution of firms is usually highly skew, and empirical evidence shows that it is closely approximated by the Pareto distribution. The first purpose of this research was to explain theoretically why the Pareto applies to the size distribution of firms. The second purpose is to develop a model of economic growth and income distribution that takes into account this empirical law. Our findings through our research may be summarized as follows :
(1) We examined the size distribution of firms of the Japanese manufacturing sector by the Census of Manufactures, and found that it was closely approximated by the Pareto distribution. Moreover, the Pareto coefficients are quite stable over long period of time.
(2) The Pareto distribution of firms are shown to be generated under the following assumptions : (1) New entry of firms is made from the minimum size. (2) Firms acquire the technology of operating efficiently on a larger scale through learning by doing. (3) They expand their of operation through the accumulation of capital which is induced by profitability.
(3) By constructing a macro dynamic model that takes into account the size distribution of firms and economies of scale, we have developed a kind of evolutionary theory of income distribution and economic growth.
As a further extension of our research, we plan to confirm empirically whether our theoretical results hold true by using the data from the Census of Manufactures more fully.
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