Does Gibrat’s Law Hold for Retailing? Evidence from Sweden

Sven-Olov Daunfeldt, Niklas Elert () and Åsa Lang
Additional contact information
Åsa Lang: Dalarna University and Mid Sweden University, Postal: Department of Business Administration , School of Technology and Business Studies , Dalarna University , SE-791 88 Borlänge , Sweden

No 164, Ratio Working Papers from The Ratio Institute

Abstract: Gibrat’s Law predicts that firm growth is a purely random effect and therefore should be independent of firm size. The purpose of this paper is to test Gibrat’s law within the retail industry, using a novel data-set comprising all Swedish limited liability companies active at some point between 1998 and 2004. Very few studies have previously investigated whether Gibrat’s Law seems to hold for retailing, and they are based on highly aggregated data. Our results indicate that Gibrat´s Law can be rejected for a large majority of five-digit retail industries in Sweden, since small retail firms tend to grow faster than large ones.

Keywords: firm dynamics; firm size; firm growth; retail (search for similar items in EconPapers)
JEL-codes: L11 L25 L81 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011-03-08
New Economics Papers: this item is included in nep-bec, nep-com, nep-ent and nep-eur
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Does Gibrat's law hold for retailing? Evidence from Sweden (2012)
Working Paper: Does Gibrat’s Law Hold for Retailing? Evidence from Sweden (2011)
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