Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25678
Authors: 
Coad, Alex
Year of Publication: 
2007
Series/Report no.: 
Jena economic research papers 2007,101
Abstract: 
While Gibrat’s Law assumes that growth rate variance is independent of size, empirical work has usually found a negative relationship between growth rate variance and firm growth. Using data on French manufacturing firms, we observe a relatively low, but statistically significant, negative relationship between firm size and growth rate variance. Furthermore, we observe that growth rate variance does not decrease monotonically the more plants a firm possesses, which is at odds with a number of theoretical models.
Subjects: 
Growth rate variance
Firm growth
Scaling relationship
Multiplant firms
Gibrat’s Law
JEL: 
L25
L20
Document Type: 
Working Paper

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