This study aims to describe the size
distribution of Portuguese firms, as measured by annual sales and total assets,
between 2006 and 2012, giving an economic interpretation for the evolution of
the distribution along the time. Three distributions are fitted to data: the
lognormal, the Pareto (and as a particular case Zipf) and the Simplified
Canonical Law (SCL). We present the main arguments found in literature to
justify the use of distributions, emphasizing the interpretation of SCL coefficients
and its analogy with thermodynamics. Methods of estimation include Maximum
Likelihood, modified Ordinary Least Squares in log-log scale and Nonlinear
Least Squares considering the Levenberg-Marquardt algorithm. We apply these
approaches to Portuguese firm data. In the sales case, the evolution of estimated
parameters in both lognormal and SCL reflects the existence of a recession
period more pronounced after 2008.
JEL Classification: C11; C13; C44; C58; C63; C87; G11; G32.
Keywords: Firms size, lognormal law, Zipf's law,
simplified canonical law, Shannon entropy