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Gibrat’S Law And Jovanovic’S Learning Theory: An Empirical Test For Small Firms In A Postconflict Economic Setting

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Listed:
  • Besnik A. Krasniqi

    (Business School, Staffordshire University, United Kingdom)

  • Saranda Lajqi

    (The University of Tirana, Tirana, Albania, and The Institute for Entrepreneurship and Small Business, Prishtina, Kosovo)

Abstract

This article tests the validity of Gibrat’s Law and Jovanovic’s learning theory for growing small and medium-sized firms (SMEs) in post-conflict economy of Kosovo. Despite evolving body of evidence suggesting that Gibrat’s Law does not hold, there is a lack of empirical evidence from transitional and post-conflict economies. This study provides econometric analysis of the relationship of age, size and growth of SMEs. The article is based on pooled SME surveys conducted by Riinvest Institute (2004- 2006). Econometric findings show that Gibrat’s Law does not hold in all model specifications while support the conventional Jovanovic’s learning theory based on growth-size age model suggesting important policy implications for promotion of small firms in Kosovo.

Suggested Citation

  • Besnik A. Krasniqi & Saranda Lajqi, 2018. "Gibrat’S Law And Jovanovic’S Learning Theory: An Empirical Test For Small Firms In A Postconflict Economic Setting," Ekonomski pregled, Hrvatsko društvo ekonomista (Croatian Society of Economists), vol. 69(3), pages 251-268.
    • Handle: RePEc:hde:epregl:v:69:y:2018:i:3:p:251-268
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    More about this item

    Keywords

    size; age; Gibrat’s Law; Jovanovic’s learning theory; growth; SMEs; Kosovo;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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