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Firm size and growth in Sweden's life insurance market between 1855 and 1947: A test of Gibrat's law

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  • Mike Adams
  • Lars Fredrik Andersson
  • Philip Hardwick
  • Magnus Lindmark

Abstract

Using data for the period from 1855 to 1947 and the two sub-periods, 1855-1902 and 1903-47, the article examines whether the organic growth rates of 38 Swedish life insurance firms are independent of size, as predicted by Gibrat's (1931) Law of Proportionate Effects. Using panel unit root tests and panel Generalised Method of Moments (GMM) regression, the article finds a significant difference between the growth rates of small and large Swedish life insurance firms (with smaller firms tending to grow faster than larger firms), a result that clearly contradicts Gibrat's Law as a long-run tendency in the Swedish life insurance sector. significant influences were also found on firm growth from profitability, organisational form, reinsurance, the real rate of interest and the Swedish regulatory environment.

Suggested Citation

  • Mike Adams & Lars Fredrik Andersson & Philip Hardwick & Magnus Lindmark, 2014. "Firm size and growth in Sweden's life insurance market between 1855 and 1947: A test of Gibrat's law," Business History, Taylor & Francis Journals, vol. 56(6), pages 956-974, September.
    • Handle: RePEc:taf:bushst:v:56:y:2014:i:6:p:956-974
    DOI: 10.1080/00076791.2013.848341
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    References listed on IDEAS

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    1. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
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    Cited by:

    1. Vieira, Elizabeth S. & Lepori, Benedetto, 2016. "The growth process of higher education institutions and public policies," Journal of Informetrics, Elsevier, vol. 10(1), pages 286-298.

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