scholarly journals Evidence of a Threshold Size for Norwegian Campsites and Its Dynamic Growth Process Implications—Does Gibrat’s Law Hold?

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 175
Author(s):  
Robin Valenta ◽  
Johannes Idsø ◽  
Leiv Opstad
Keyword(s):  
Growth Process ◽  
Growth Path ◽  
Growth Trend ◽  
Gibrat’S Law ◽  
Threshold Size ◽  
Regional Impacts ◽  
Gibrat's Law ◽  
Dynamic Growth ◽  
Carry Over ◽  
Government Statistics

Although campsites are an important segment of the tourist sector, few applied articles have analyzed their growth path and tested Gibrat’s Law for firms within this industry. This knowledge can be of importance to the authorities when analyzing the regional impacts of growth in this sector. With government statistics from the last decade, we use a GMM framework to test the stricter version of Gibrat’s Law, which consist of three parts: the campsites’ growth trend, how they carry over success and failure, and how volatile their size is. The first and third part are rejected for Norwegian campsites, leading to a rejection of Gibrat’s Law. To see if firms of different sizes follow different dynamics, we split the sample in three parts. Here, we find evidence of a threshold size, as large campsites follow a fundamentally different dynamic than small and medium campsites. Specifically, large campsites gain no stability in revenue by further increases in size, whereas they carry over success/failure across years. The opposite is true for the rest of the sector. Gibrat’s Law is rejected on at least one count for each of the sub-samples. Lastly, we supplement the analysis with economy-wide and firm-specific variables to test further hypotheses.

Profitability and Firm Size–Growth Relationship in Construction Companies in Malaysia From 2003 to 2010

2014 ◽  
Vol 17 (03) ◽  
pp. 1450014 ◽  
Author(s):  
Devinaga Rasiah ◽  
David Yoon Kin Tong ◽  
Peong Kwee Kim
Keyword(s):  
Growth Rate ◽  
Firm Size ◽  
Growth Process ◽  
Secondary Data ◽  
Annual Reports ◽  
Basic Study ◽  
Gibrat’S Law ◽  
Construction Companies ◽  
Gibrat's Law ◽  
Size Growth

In this study, we intended to examine empirically how a firm's profitability performance would impact its growth process and the inference for Gibrat's Law. The basic study looks at small, medium and large firms' tendency to grow when their internally generated profits are high. The sample is 124 construction companies listed from years 2003 to 2010 at BURSA Malaysia. Data used is secondary data collected from BURSA Malaysia and annual reports. The result indicated that "growth" contributed significantly to profitability in both small and medium-sized construction companies, but was not significant in large companies. Thus, hypothesis two was supported. This study supports Gibrat's Law, showing that size and growth rate are independent.

Growth and Firm Size Distribution

2016 ◽  
Vol 14 (2) ◽  
pp. 61-73
Author(s):  
Wei Zhang ◽  
Yan-Chun Zhu ◽  
Jian-Bo Wen ◽  
Yi-Jie Zhuang
Keyword(s):  
Size Distribution ◽  
Firm Size ◽  
Zipf’S Law ◽  
Growth Path ◽  
Firm Size Distribution ◽  
Zipf's Law ◽  
Gibrat’S Law ◽  
Gibrat's Law ◽  
Quantile Regression Method ◽  
The Relationship

Studies on the firm's size distribution (FSD) can set a good foundation to know about the growth path and mechanism of e-commerce firms. The purpose of this paper is to understand features of the China's listed e-commerce firms by testing Gibrat's law and Zipf's law within the Internet sectors. From a macroscopic perspective, with the approach of OLS estimation, Zipf's coefficient of the FSD is calculated to test whether Zipf's law holds. From a microscopic perspective, the relationship between e-commerce firm size and growth is explored by quantile regression method. The results indicate that from 2005 to 2014, Zipf's law cannot be rejected, with the relationship changing over time, Gibrat's law holds partly. It implies that competition status among China's e-commerce firms becomes more stable.

scholarly journals Defending Gibrat’s Law as a long-run regularity

2007 ◽  
Vol 32 (1) ◽  
pp. 31-44 ◽  
Author(s):  
Francesca Lotti ◽  
Enrico Santarelli ◽  
Marco Vivarelli
Keyword(s):  
Gibrat’S Law ◽  
Gibrat's Law ◽  
Long Run

Human capital divergence and the size distribution of cities: Is Gibrat’s law obsolete?

Urban Studies ◽  
2020 ◽  
pp. 004209802095309
Author(s):  
Daniel Broxterman ◽  
Anthony Yezer
Keyword(s):  
Human Capital ◽  
Population Growth ◽  
Size Distribution ◽  
Growth Models ◽  
Theoretical Models ◽  
Empirical Literature ◽  
Skilled Workers ◽  
Gibrat’S Law ◽  
Gibrat's Law ◽  
Growth Hypothesis

This article studies how the changing geographic distribution of skilled workers in the US affects theoretical models that use Gibrat’s law to explain the size distribution of cities. In the empirical literature, a divergence hypothesis holds that college share increases faster in cities where college share is larger, and a growth hypothesis maintains that the rate of city population growth is also directly related to initial college share. Examining the divergence hypothesis, the classic test for Gibrat’s law is shown to be a test for [Formula: see text]-convergence. Testing shows that there has been absolute, not relative, divergence in human capital since the 1970s. However, the combination of even absolute divergence and the growth hypothesis is shown to violate the condition that a city’s population growth is independent of its size. Additional testing finds that the relation between college share and city growth is concave rather than monotonic. These results imply that stochastic growth models can survive the challenge posed by divergence in the distribution of human capital.

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