Gibrat’s Law with Mild Nonrandom Growth
Gibrat’s Law (GL) has repeatedly failed to gain full empirical confirmation in specific industries. This study offers a deliberately favorable opportunity for full confirmation in the truckload sector of the U.S. trucking industry where firms are highly homogeneous. As such, most nonrandom determinants of growth remain very similar for all firms, so significant differences in growth rates are not expected. Still, there is only incomplete support: (1) long term growth rates are not equal for all firms, but the differences are small and not size-related except for the smallest firms, and (2) the size distributions better approximate lognormal when the smallest firms are excluded, but in no case does the variance rise over time. This suggests that for most other industries, where nonrandom growth should be much stronger, GL would seem unlikely to play more than a minor role in portraying actual firm growth or the evolution of market structure. Copyright International Atlantic Economic Society 2010
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Volume (Year): 38 (2010)
Issue (Month): 2 (June)
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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.:
- Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-674, August.
- D.B. Audretsch & L. Klomp & E. Santarelli & A.R. Thurik, 2004.
"Gibrat's Law: Are the Services Different?,"
Review of Industrial Organization,
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- Audretsch, D.B. & Klomp, L. & Thurik, A.R., 2002. "Gibrat's Law: are the services different?," ERIM Report Series Research in Management ERS-2002-04-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Roy Thurik & Enrico Santarelli & David Audretsch & Luuk Klomp, 2002. "Gibrat's Law: Are the Services Different?," Scales Research Reports H200201, EIM Business and Policy Research.
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