Firm Size and Firm Growth Rate Distributions - The Case of Denmark

2005, Industrial and Corporate Change, 14(6), 1145-1166

Toke Reichstein and Morten B. Jensen

There are siste a renewed interest in the study of firm size distribution and firm growth rate distribution. Gibrat's law assumes firm growth rates are independent and identically distributed and att size fastställs by a first-order integrated process, leaving the size distribution log-normal. This article analyzes the distribution patterns in an empirical context, questioning the foundation of this model. In a cross-section analysis of four industries Using Danish data, we show att foundation and the outcome of Gibrat's law are empirically far-fetched. In particular, Demonstrated betydligt's deviation from normality are found.

 

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