for helpful comments. We also thank Michael Dahl for access to information on changes in the firm size distribution in Denmark and Javier Miranda for similar information on changes in the firm size distribution in the U.S. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research, nor do they reflect the views of any branch, agency, or ministry of the Government of Portugal. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.