Are There “Natural” Market Structures?

This article shows that distributions of market shares in narrowly-defined product markets follow the same general pattern found in earlier studies of broad “industries” and in the economy as a whole. Typically, the structure of a market conforms to the semi-logarithmic distribution; this pattern is so pervasive as to suggest that it is a “natural” phenomenon. The nature of growth processes that lead to unequal distributions of size is explored, and evidence from the PIMS data base is used to test two key assumptions about business growth and its relationship to size.