Firm Growth and Scaling of Growth Rate Variance in Multiplant Firms

Alex Coad ()

No 2007-101, Jena Economic Research Papers in Economics from Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek

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.

Keywords: Growth rate variance; Firm growth; Scaling relationship; Multiplant ï¬rms; Gibrat's Law (search for similar items in EconPapers)
JEL-codes: L25 L20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-ent
Date: 2007-12-18

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Related works:
Journal Article: Firm growth and scaling of growth rate variance in multiplant firms (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:jrp:jrpwrp:2007-101

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