Relative size distribution of business firms - A QRSE approach

Using various firm size measures for publicly traded business firms in the USA, this paper employs a quantal response statistical equilibrium model to study empirical regularities in size distributions. The study found an increase in randomness regarding firm responsiveness, a stronger dependency of the equilibrium distribution on changes in firm decisions, and lower levels of aspiration. The model also indicates a persistently negative gap between the aspired relative size and the center of mass of the distribution.