Does Gibrat’s law hold in the case of young, small firms?

Lotti, Francesca ; Santarelli, Enrico ; Vivarelli, Marco (1999) Does Gibrat’s law hold in the case of young, small firms? DOI 10.6092/unibo/amsacta/705.
Full text available as:
[img]
Preview
PDF
Download (99kB) | Preview

Abstract

According to Gibrat’s Law of Proportionate Effect, the growth rate of a given firm is independent of its size at the beginning of the examined period. This paper investigates whether Gibrat’s Law holds for new entrants in a given industry: that is for new small firms in the early stage of their life cycle. The main finding is that in some (but not in all) selected industries in Italian manufacturing Gibrat’s Law fails to hold in the years immediately following start-up, when smaller firms have to rush in order to achieve a size large enough to enhance their likelihood of survival. Conversely, in subsequent years the patterns of growth of smaller firms do not differ significantly from those of larger ones, and the Law is therefore confirmed.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lotti, Francesca
Santarelli, Enrico
Vivarelli, Marco
Keywords
Market dynamics young firms small firms Gibrat’s Law sample selection
Subjects
DOI
Deposit date
17 Jun 2004
Last modified
17 Feb 2016 14:01
URI

Other metadata

Downloads

Downloads

Staff only: View the document

^