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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; Centre d'Economie de la Sorbonne, Equipe MATISSE, Univ. Paris 1 - CNRS)

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 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.

Suggested Citation

  • Alex Coad, 2007. "Firm Growth and Scaling of Growth Rate Variance in Multiplant Firms," Jena Economic Research Papers 2007-101, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2007-101
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    References listed on IDEAS

    as
    1. 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

    More about this item

    Keywords

    Growth rate variance; Firm growth; Scaling relationship; Multiplant ï¬ rms; Gibrat's Law;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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