EconPapers    
Economics at your fingertips  
 

Do firms’ growth rates depend on firm size?

Jan Bentzen, Erik Madsen and Valdemar Smith ()

Small Business Economics, 2012, vol. 39, issue 4, 937-947

Abstract: The empirical literature dealing with corporate growth does not in general give support to Gibrat’s Law stating that the expected increase in firm size is proportionate to its initial size, leaving their growth rates independent of size. Using a relatively large and representative sample of approximately 2,500 Danish firms representing all industries, we have evaluated the validity of Gibrat’s Law over the period 1990–2004. The present analysis addresses this question by applying econometric methods to test Gibrat’s Law and correcting for problems related to autocorrelation. The empirical findings of our study do not generally support Gibrat’s Law, but in contrast to the results of earlier studies, the analysis reveals that firms’ growth rates are more likely to be positively related to firm size. Copyright Springer Science+Business Media, LLC. 2012

Keywords: Gibrat’s Law; Firm size and growth; Panel data; Non-linear regressions; C23; D22; L11; L26 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s11187-011-9341-8 (text/html)
Access to full text is restricted to subscribers.

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:kap:sbusec:v:39:y:2012:i:4:p:937-947

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-011-9341-8

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2021-06-04
Handle: RePEc:kap:sbusec:v:39:y:2012:i:4:p:937-947