Firm growth and scaling of growth rate variance in multiplant firms
AbstractWhile 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 InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 12 (2008)
Issue (Month): 9 ()
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- Alex Coad, 2007. "Firm Growth and Scaling of Growth Rate Variance in Multiplant Firms," Jena Economic Research Papers 2007-101, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
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