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Firm growth and scaling of growth rate variance in multiplant firms

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  • Alex Coad

    () (Max Planck Institute of Economics, Jena, Germany)

Abstract

While 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.

Suggested Citation

  • Alex Coad, 2008. "Firm growth and scaling of growth rate variance in multiplant firms," Economics Bulletin, AccessEcon, vol. 12(9), pages 1-15.
  • Handle: RePEc:ebl:ecbull:eb-07l20013
    as

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    References listed on IDEAS

    as
    1. Alex Coad, 2007. "A Closer Look at Serial Growth Rate Correlation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(1), pages 69-82, August.
    2. Giulio Bottazzi & Alex Coad & Nadia Jacoby & Angelo Secchi, 2011. "Corporate growth and industrial dynamics: evidence from French manufacturing," Applied Economics, Taylor & Francis Journals, vol. 43(1), pages 103-116.
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    Cited by:

    1. Alex Coad & Tom Broekel, 2012. "Firm growth and productivity growth: evidence from a panel VAR," Applied Economics, Taylor & Francis Journals, vol. 44(10), pages 1251-1269, April.
    2. Alex Coad & Werner Hölzl, 2012. "Firm Growth: Empirical Analysis," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 24 Edward Elgar Publishing.
    3. repec:tou:journl:v:45:y:2017:p:31-58 is not listed on IDEAS

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    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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