When is Gibrat's Law a Law?
AbstractThe purpose of this paper is to investigate if the industry context matters for whether Gibrat's law is rejected or not using a dataset that consists of all limited firms in 5-digit NACE-industries in Sweden during 1998-2004. The results reject Gibrat's law on an aggregate level, since small firms grow faster than large firms. However, Gibrat's law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context - e.g., minimum efficient scale, market concentration rate, and number of young firms in the industry - matters for whether Gibrat's law is rejected or not.
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Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 158.
Length: 38 pages
Date of creation: 29 Nov 2010
Date of revision:
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Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
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Firm growth; firm size; job creation; small firms;
Other versions of this item:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-11 (All new papers)
- NEP-BEC-2010-12-11 (Business Economics)
- NEP-COM-2010-12-11 (Industrial Competition)
- NEP-ENT-2010-12-11 (Entrepreneurship)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mercedes Teruel-Carrizosa, 2010. "Gibrat’s law and the learning process," Small Business Economics, Springer, vol. 34(4), pages 355-373, May.
- Elena Cefis & Luigi Orsenigo, 1998.
"The Persistence of Innovative Activities. A Cross-Countries and Cross-Sectors Comparative Analysis,"
Department of Economics Working Papers
9804, Department of Economics, University of Trento, Italia.
- Cefis, Elena & Orsenigo, Luigi, 2001. "The persistence of innovative activities: A cross-countries and cross-sectors comparative analysis," Research Policy, Elsevier, vol. 30(7), pages 1139-1158, August.
- Tang, Ali, 2014. "Does Gibrat’s Law Hold for Swedish Energy Firms?," HUI Working Papers 99, HUI Research.
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