Gibrat, Galton and Job Generation

Peter Hart and Nicholas Oulton

International Journal of the Economics of Business, 1999, vol. 6, issue 2, 149-164

Abstract: The proportionate growth of a company decreases with increases in its initial size, in accordance with the Galton model of regression towards the mean. Gibrat's Law of proportionate effect does not hold within size classes or within industries. In job generation accounting, actual increases in employment are even more important than proportionate ones. In the UK small and medium sized companies had larger absolute and proportionate increases in employment than did large companies and were responsible for most of the increase in jobs 1989-93. In fact large companies tended to reduce the numbers they employed.

Keywords: Gibrat; Job Creation; Small Firms; Growth (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (30)

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DOI: 10.1080/13571519984197

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