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Firm growth and scaling of growth rate variance in multiplant firms

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  • Alex Coad

    ()
    (Max Planck Institute of Economics, Jena, Germany)

Abstract

While Gibrat's Law assumes that growth rate variance is independent of size, empirical work has usually found a negative relationship between growth rate variance and firm growth. Using data on French manufacturing firms, we observe a relatively low, but statistically significant, negative relationship between firm size and growth rate variance. Furthermore, we observe that growth rate variance does not decrease monotonically the more plants a firm possesses, which is at odds with a number of theoretical models.

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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 12 (2008)
Issue (Month): 9 ()
Pages: 1-15

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Handle: RePEc:ebl:ecbull:eb-07l20013

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  3. Alex Coad, 2006. "A Closer Look at Serial Growth Rate Correlation," LEM Papers Series 2006/29, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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  13. Giulio Bottazzi & Alex Coad & Nadia Jacoby & Angelo Secchi, 2011. "Corporate growth and industrial dynamics: evidence from French manufacturing," Applied Economics, Taylor & Francis Journals, vol. 43(1), pages 103-116.
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