Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272622 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 15995
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Using both regression analysis and an unsupervised graphical model approach (never applied before to this issue), we confirm the rejection of the Gibrat's law when our firm-level data are considered over the entire investigated period, while the opposite is true when we allow for market selection. Indeed, the growth behavior of the re-shaped (smaller) population of the survived most efficient firms is in line with the Law of Proportionate Effect; this evidence reconciles early and current literature testing Gibrat's law and may have interesting implications in terms of both applied and theoretical research.
Subjects: 
Gibrat's Law
firm survival
market selection
firm growth
JEL: 
L11
Document Type: 
Working Paper

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