On the upper tail of Italian firms’ size distribution

In this paper we analyze the upper tail of the size distribution of Italian companies with limited liability belonging to the CEBI database. Size is defined in terms of net worth. In particular, we show that the largest firms follow a power law distribution, according to the well-known Pareto law, for which we give estimates of the shape parameter. Such a behavior seems to be quite persistent over time, view that for almost 20 years of observations, the shape parameter is always in the vicinity of 1.8. The power law hypothesis is also positively tested using graphical and analytical methods.