 Revisiting Gibrat's law using panel SURADF testsHsiao-Ping Chu, Peter Sher and Ming-Liang Yeh Applied Economics Letters, 2007, vol. 15, issue 2, 137-143 Abstract: In this study, the newly-developed Panel SURADF tests advanced by Breuer et al. (2001) are used to investigate whether the growth rate of electronics firms is independent of their size, as postulated by Gibrat's (1931) Law of Proportionate Effects. Time-series data for the total assets of 48 electronic firms in Taiwan during the 1995-2004 period are used. Whereas other panel-based unit root tests are joint tests of a unit root for all members of a panel and are incapable of determining the mix of I(0) and I(1) series in a panel setting, the Panel SURADF tests investigate a separate unit root null hypothesis for each individual panel member and are, therefore, able to identify how many and which series in the panel are stationary processes. The empirical results from several panel-based unit root tests indicate that the total assets of all firms studied here are nonstationary, implying that Gibrat's Law holds for all 48 firms; however, Breuer et al.'s (2001) Panel SURADF tests unequivocally indicate that Gibrat's Law is only valid for 27 of those firms. Date: 2007 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:15:y:2007:i:2:p:137-143 Ordering information: This journal article can be ordered from DOI: 10.1080/13504850600706339 Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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