Gibrat's Law and the Firm Size / Firm Growth Relationship in Italian Services

R. Piergiovanni, Enrico Santarelli, L. Klomp and Roy Thurik
Additional contact information
R. Piergiovanni: Statistics Italy, Rome
L. Klomp: Ministry of Economic Affairs, The Hague

No 02-080/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Several surveys on intra-industry dynamics have recently reached the conclusion from a large body of evidence that Gibrat's Law does not hold, i.e., the main finding is that firm growth decreases with firm size. However, almost all of these studies have been based on manufacturing. In this paper - in search of further evidence supporting the results recently obtained for a large sample of Dutch firms in the hospitality industry - we examine whether the assumption that growth rates are independent of firm size can be rejected for the services, as it has been for manufacturing, also in the case of Italy. Based on a large sample of Italian new-born firms in five business groups in the hospitality industry, the evidence suggests that growth rates are, in fact, independent of firm size in two business groups, while Gibrat's Law is rejected for the remaining three business groups and for the industry as a whole. These mixed results concerning Gibrat's Law in the services are consistent with the hypothesis that the dynamics of industrial organisation for services may not simply mirror that for manufacturing. Besides, the findings in this paper support the hypothesis that any general conclusion concerning Gibrat's Law cannot be reached without considering heterogeneity, at least among firms of different industries.

Keywords: firm growth; service industries; Gibrat's Law; Italy. (search for similar items in EconPapers)
JEL-codes: D21 L11 L60 L80 (search for similar items in EconPapers)
Date: 2002-08-14
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://papers.tinbergen.nl/02080.pdf (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:tin:wpaper:20020080

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().