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Gibrat’s law test on Brazilian commercial banks

Author

Listed:
  • Maria de Mar Miralles-Quiros

    (Universidad de Extremadura, Espa˜na)

  • José Luis Millares-Quiros

    (Universidad de Extremadura, Espa˜na)

  • Julio Daza-Izquierdo

    (Universidad de Extremadura, Espa˜na)

Abstract

In recent years, Brazil has been one of the countries with the biggest changes in the banking sector. The process of deregulation that began in 2002 has entailed the increase of the presence of foreign banking and the increase of competition, among other aspects. In this context, the objective of this study consists in contrasting Gibrat’s Law in the Brazilian commercial banking during the period of 2002–2013 with the objective of contributing with evidence for the construction of a growth model for banking that will guide the financial policy of the country. For this, the quartile regression methodology is utilized, since we consider that it analyzes the relation between growth and the size of the entities more thoroughly than the empirical contrasts given by previous empirical evidence. The results obtained indicate that there is a non-linear relation in an inverted U form between growth and size in the Brazilian commercial banking. These results allow us to affirm that the relative dispersion of the sizes of the financial entities will tend to decrease in time and with this, the concentration of the sector.

Suggested Citation

  • Maria de Mar Miralles-Quiros & José Luis Millares-Quiros & Julio Daza-Izquierdo, 2017. "Gibrat’s law test on Brazilian commercial banks," Contaduría y Administración, Accounting and Management, vol. 62(5), pages 29-30, Diciembre.
    • Handle: RePEc:nax:conyad:v:62:y:2017:i:5:p:29-30
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    References listed on IDEAS

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    5. Ann‐Marie Ward & Donal G. McKillop, 2005. "The Law of Proportionate Effect: The Growth of the UK Credit Union Movement at National and Regional Level," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(9‐10), pages 1827-1859, November.
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    Cited by:

    1. Ulf Hübenbecker, 2024. "Is nobody interested in the future of banks? a scoping literature review on the state of the debate," Management Review Quarterly, Springer, vol. 74(3), pages 1283-1326, September.

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    More about this item

    Keywords

    Commercial banks; Brazil; Gibrat’s law; Growth; Size;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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