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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 Economics Research Papers 2007-101, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2007-101
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    References listed on IDEAS

    as
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    18. 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.
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    Cited by:

    1. Calvino, Flavio & Criscuolo, Chiara & Menon, Carlo & Secchi, Angelo, 2018. "Growth volatility and size: A firm-level study," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 390-407.
    2. Stefania Vitali & Mauro Napoletano & Giorgio Fagiolo, 2013. "Spatial Localization in Manufacturing: A Cross-Country Analysis," Regional Studies, Taylor & Francis Journals, vol. 47(9), pages 1534-1554, October.
    3. 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.
    4. Alex Coad & Werner Hölzl, 2012. "Firm Growth: Empirical Analysis," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 24, Edward Elgar Publishing.
    5. Fabio Pieri, 2018. "Vertical organization of production and firm growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(1), pages 83-106.
    6. Aziza GARSAA & Nadine LEVRATTO, 2017. "Les disparités d’évolution de l’emploi sont-elles dues à la nature des entreprises ou à leur localisation ? Une analyse multiniveaux sur les zones d’emploi françaises," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 45, pages 31-58.
    7. repec:hal:spmain:info:hdl:2441/9932 is not listed on IDEAS

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    More about this item

    Keywords

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

    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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