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 ï¬rm growth. Using data on French manufacturing ï¬rms, we observe a relatively low, but statistically signiï¬cant, negative relationship between ï¬rm size and growth rate variance. Furthermore, we observe that growth rate variance does not decrease monotonically the more plants a ï¬rm possesses, which is at odds with a number of theoretical models.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-101.
Date of creation: 18 Dec 2007
Date of revision:
Growth rate variance; Firm growth; Scaling relationship; Multiplant ï¬rms; Gibrat's Law;
Other versions of this item:
- Alex Coad, 2008. "Firm growth and scaling of growth rate variance in multiplant firms," Economics Bulletin, AccessEcon, vol. 12(9), pages 1-15.
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-05 (All new papers)
- NEP-BEC-2008-01-05 (Business Economics)
- NEP-ENT-2008-01-05 (Entrepreneurship)
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