FIRM SIZE – FIRM GROWTH RELATIONSHIP DURING ECONOMIC CRISIS

Marko Peric (), Vanja Vitezić () and Ana Peric Hadzic ()
Additional contact information
Marko Peric: University of Rijeka
Ana Peric Hadzic: University of Rijeka

Economic Thought and Practice, 2020, vol. 29, issue 1, 29-53

Abstract: The great recession of 2008 hit the entrepreneurial sector all over the world. Understanding the pattern of firms’ reactions in a time of global crisis is essential for developing an adequate crisis and post-crisis policy. Using a sample of 7,563 surviving Croatian firms in the manufacturing and hospitality industries over the six-year period of economic recession (2008-2013) and total assets as a measurement of firm size and growth, this study seeks to examine whether the law of proportionate effect can be confirmed in times of economic recession. The results of a two-step dynamic panel indicate the rejection of the law in both industries since asset growth is positively associated with the size of the firms. However, firms’ total assets dynamics differ across size classes and industries suggesting potentially different strategic decisions on asset utilization and/or investments.

Keywords: firm growth; Gibrat’s Law; hospitality; manufacturing; recession (search for similar items in EconPapers)
JEL-codes: G01 G30 L25 L26 M13 M21 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hrcak.srce.hr/clanak/347736 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:avo:emipdu:v:29:y:2020:i:1:p:29-53

Ordering information: This journal article can be ordered from
Economic Thought and Practice, University of Dubrovnik, Branitelja Dubrovnika 29, 20000 Dubrovnik
https://emip.unidu.hr/

Access Statistics for this article

Economic Thought and Practice is currently edited by Nebojsa Stojcic

More articles in Economic Thought and Practice from Department of Economics and Business, University of Dubrovnik Contact information at EDIRC.
Bibliographic data for series maintained by Nebojsa Stojcic ().