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Do Growth Rates Depend On The Initial Firm Size? Evidence For The German Agribusiness

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  • Hohler, Julia
  • Kuhl, Rainer

Abstract

The Agribusiness is in flux: a shrinking number of up- and downstream corporations questions traditional equilibrium concepts. How will the population of firms develop and which consequences will arise for competition? In 1931, Gibrat stated the firm size and a firm’s growth rate to be independent. Testing the validity of Gibrat’s law for the German Agribusiness allows drawing conclusions on future developments of concentration. By investigating 551 manufacturing downstream enterprises, we reject Gibrat’s law and find small firms to grow stronger than bigger firms in relation to their initial size. Consequently, the sector could reach a steady state in concentration.

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  • Hohler, Julia & Kuhl, Rainer, 2014. "Do Growth Rates Depend On The Initial Firm Size? Evidence For The German Agribusiness," 54th Annual Conference, Goettingen, Germany, September 17-19, 2014 187593, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi14:187593
    DOI: 10.22004/ag.econ.187593
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