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When is Gibrat’s Law a Law?

PublicationArticle (with peer review)
Företagandets villkor, Företagsstorlek, Gibrat's lag, Jobbskapande, Niklas Elert, Småföretag, Sven-Olov Daunfeldt, Tillväxt

Abstract

The purpose of this article is to investigate if the industry context matters for whether Gibrat’s law is rejected or not using a dataset that consists of all limited firms in five-digit NACE-industries in Sweden during 1998–2004. The results reject Gibrat’s law on an aggregate level, since small firms grow faster than large firms. However, Gibrat’s law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context—e.g., minimum efficient scale, market concentration rate, and number of young firms in the industry—matters for whether Gibrat’s law is rejected or not.

Related content: Working paper No. 158

Daunfeldt, S-O., & Elert, N. (2013). When is Gibrat’s Law a Law?Small Business Economics, 41(1), 133–147. DOI: 10.1007/s11187-011-9404-x

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When is Gibrat’s Law a Law?
Artikel (med peer review)Publication
Daunfeldt, S-O., & Elert, N.
Publication year

2013

Abstract

The purpose of this article is to investigate if the industry context matters for whether Gibrat’s law is rejected or not using a dataset that consists of all limited firms in five-digit NACE-industries in Sweden during 1998–2004. The results reject Gibrat’s law on an aggregate level, since small firms grow faster than large firms. However, Gibrat’s law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context—e.g., minimum efficient scale, market concentration rate, and number of young firms in the industry—matters for whether Gibrat’s law is rejected or not.

Related content: Working paper No. 158

Working paper No. 158. When is Gibrat’s Law a Law?
Working paperPublication
Daunfeldt, S-O., & Elert, N.
Publication year

2010

Abstract

The purpose of this paper is to investigate if the industry context matters for whether Gibrat’s law is rejected or not using a dataset that consists of all limited firms in 5-digit NACE-industries in Sweden during 1998-2004. The results reject Gibrat’s law on an aggregate level, since small firms grow faster than large firms. However, Gibrat’s law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context – e.g., minimum effcient scale, market concentration rate, and number of young firms in the industry – matters for whether Gibrat’s law is rejected or not.

Related content: When is Gibrat’s Law a Law?

Working paper No. 158. When is Gibrat’s Law a Law?
Working paperPublication
Daunfeldt, S-O., & Elert, N.
Publication year

2010

Abstract

The purpose of this paper is to investigate if the industry context matters for whether Gibrat’s law is rejected or not using a dataset that consists of all limited firms in 5-digit NACE-industries in Sweden during 1998-2004. The results reject Gibrat’s law on an aggregate level, since small firms grow faster than large firms. However, Gibrat’s law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context – e.g., minimum effcient scale, market concentration rate, and number of young firms in the industry – matters for whether Gibrat’s law is rejected or not.

Related content: When is Gibrat’s Law a Law?

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