GIBRAT’S LAW AND JOVANOVIC’S LEARNING THEORY: AN EMPIRICAL TEST FOR SMALL FIRMS IN A POSTCONFLICT ECONOMIC SETTING

Besnik Krasniqi () and Saranda Lajqi
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Saranda Lajqi: The University of Tirana, Tirana, Albania, and The Institute for Entrepreneurship and Small Business, Prishtina, Kosovo

Ekonomski pregled, 2018, vol. 69, issue 3, 251-268

Abstract: This article tests the validity of Gibrat’s Law and Jovanovic’s learning theory for growing small and medium-sized firms (SMEs) in post-conflict economy of Kosovo. Despite evolving body of evidence suggesting that Gibrat’s Law does not hold, there is a lack of empirical evidence from transitional and post-conflict economies. This study provides econometric analysis of the relationship of age, size and growth of SMEs. The article is based on pooled SME surveys conducted by Riinvest Institute (2004- 2006). Econometric findings show that Gibrat’s Law does not hold in all model specifications while support the conventional Jovanovic’s learning theory based on growth-size age model suggesting important policy implications for promotion of small firms in Kosovo.

Keywords: size; age; Gibrat’s Law; Jovanovic’s learning theory; growth; SMEs; Kosovo (search for similar items in EconPapers)
JEL-codes: L25 L26 M13 M21 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:hde:epregl:v:69:y:2018:i:3:p:251-268

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