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Testing Gibrat’s Law: Empirical Evidence from a Panel of Portuguese Manufacturing Firms

Author

Listed:
  • Blandina Oliveira

    (ESTG, Instituto Politécnico de Leiria)

  • Adelino Fortunato

    (GEMF and Faculdade de Economia, Universidade de Coimbra)

Abstract

The purpose of this paper is to use Dynamic Panel Data (DPD) models to see if Gibrat’s law holds and to analyse the empirical determinants of firm growth. This paper makes significant contributions to the empirical literature on the dynamics of firm growth, since it updates the work carried out by previous researchers in this field using micro panel data and GMM estimators. To conduct this study we use an unbalanced panel of Portuguese manufacturing firms over the period from 1990 to 1999. The main implication of our findings is that firm growth is not quite random since there are some determinants which exert influence on firm growth.

Suggested Citation

  • Blandina Oliveira & Adelino Fortunato, 2003. "Testing Gibrat’s Law: Empirical Evidence from a Panel of Portuguese Manufacturing Firms," GEMF Working Papers 2003-07, GEMF, Faculty of Economics, University of Coimbra.
    • Handle: RePEc:gmf:wpaper:2003-07
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    More about this item

    Keywords

    Firm growth; Gibrat’s law; Panel data; GMM estimators;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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