2024/09/14 by Thiago Trafane Oliveira Santos, Santos, Thiago Trafane Oliveira, Daniel O. Cajueiro +1 · 1 citation
Economics, Econometrics and Finance · #Applications (stat.AP) #FOS: Computer and information sciences #Firm Innovation and Growth
paper · pdf · doi:10.48550/arxiv.2409.09470
openalex publication_date 2024/09/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Zipf's law states that the probability of a variable being larger than s is roughly inversely proportional to s. In this paper, we evaluate Zipf's law for the distribution of firm size by the number of employees in Brazil. We use publicly available binned annual data from the Central Register of Enterprises (CEMPRE), which is held by the Brazilian Institute of Geography and Statistics (IBGE) and covers all formal organizations. Remarkably, we find that Zipf's law provides a very good, although not perfect, approximation to data for each year between 1996 and 2020 at the economy-wide level and also for agriculture, industry, and services alone. However, a lognormal distribution also performs well and even outperforms Zipf's law in certain cases.