IDEAS home Printed from https://ideas.repec.org/b/wfo/wstudy/34231.html
   My bibliography  Save this book

Testing Gibrat's Law for European Multinational Enterprises

Author

Listed:
  • Martin Falk

    (WIFO)

Abstract

This paper investigates the link between firm size and growth for European multinational enterprises based on the AMADEUS firm-level database. Using data for about 20,000 firms for the period of 2000–2004, we find that firm size has a significant negative impact on firm growth of the multinational enterprises. This holds when growth and ist level are measured in terms of employment or turnover. Estimates for seven broad industry groups reveal that the negative relationship can be observed in all industries, with greater effects in business services and in the investment goods industry. Furthermore we find that the average year of foundation of the foreign affiliates has a positive impact on the growth of the parent companies.

Suggested Citation

  • Martin Falk, 2008. "Testing Gibrat's Law for European Multinational Enterprises," WIFO Studies, WIFO, number 34231.
    • Handle: RePEc:wfo:wstudy:34231
    as

    Download full text from publisher

    File URL: https://www.wifo.ac.at/wwa/pubid/34231
    File Function: abstract
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.
    2. Ludo Cuyvers & Michel Dumont & Glenn Rayp & Katrien Stevens, 2005. "Home Employment Effects of EU Firms’ Activities in Central and Eastern European Countries," Open Economies Review, Springer, vol. 16(2), pages 153-174, April.
    3. Harald Oberhofer & Michael Pfaffermayr, 2013. "Firm growth in multinational corporate groups," Empirical Economics, Springer, vol. 44(3), pages 1435-1453, June.
    4. Paul Geroski & Klaus Gugler, 2004. "Corporate growth convergence in Europe," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 597-620, October.
    5. Variyam, Jayachandran N. & Kraybill, David S., 1992. "Empirical evidence on determinants of firm growth," Economics Letters, Elsevier, vol. 38(1), pages 31-36, January.
    6. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    7. Giulio Bottazzi & Angelo Secchi, 2003. "Common Properties and Sectoral Specificities in the Dynamics of U.S. Manufacturing Companies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(3_4), pages 217-232, December.
    8. Jozef Konings & Alan Patrick Murphy, 2006. "Do Multinational Enterprises Relocate Employment to Low-Wage Regions? Evidence from European Multinationals," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(2), pages 267-286, July.
    9. Hall, Bronwyn H, 1987. "The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 583-606, June.
    10. Geroski, Paul A, 1999. "The Growth of Firms in Theory and in Practice," CEPR Discussion Papers 2092, C.E.P.R. Discussion Papers.
    11. Francesca Lotti & Enrico Santarelli & Marco Vivarelli, 2003. "Does Gibrat's Law hold among young, small firms?," Journal of Evolutionary Economics, Springer, vol. 13(3), pages 213-235, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:wsr:ecbook:2008:i:i-014 is not listed on IDEAS
    2. Giulio Bottazzi & Angelo Secchi, 2006. "Explaining the distribution of firm growth rates," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 235-256, June.
    3. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.
    4. Giorgio Barba Navaretti & Davide Castellani & Fabio Pieri, 2014. "Age and firm growth: evidence from three European countries," Small Business Economics, Springer, vol. 43(4), pages 823-837, December.
    5. Daria Ciriaci & Pietro Moncada-Paternò-Castello & Peter Voigt, 2016. "Innovation and job creation: a sustainable relation?," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(2), pages 189-213, August.
    6. Canarella, Giorgio & Miller, Stephen M., 2018. "The determinants of growth in the U.S. information and communication technology (ICT) industry: A firm-level analysis," Economic Modelling, Elsevier, vol. 70(C), pages 259-271.
    7. Aili Tang, 2015. "Does Gibrat’s law hold for Swedish energy firms?," Empirical Economics, Springer, vol. 49(2), pages 659-674, September.
    8. Harabi, Najib, 2003. "Déterminants de la croissance des entreprises: Une analyse empirique du Maroc [Determinants of Firm Growth: An Empirical Analysis from Morocco]," MPRA Paper 4440, University Library of Munich, Germany.
    9. Harabi, Najib, 2005. "Determinants of Firm Growth: An Empirical Analysis from Morocco," MPRA Paper 4394, University Library of Munich, Germany.
    10. Cefis, Elena & Ciccarelli, Matteo & Orsenigo, Luigi, 2007. "Testing Gibrat's legacy: A Bayesian approach to study the growth of firms," Structural Change and Economic Dynamics, Elsevier, vol. 18(3), pages 348-369, September.
    11. Rolando Vaz, 2023. "Firm growth in the Portuguese footwear industry: the location dilemma," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 70(2), pages 407-427, April.
    12. F. Zhou & W.J.W. Botzen, 2017. "The Impact of Natural Disasters on Firm Growth in Vietnam:: Interaction with Financial Constraints," Working Papers 17-20, Utrecht School of Economics.
    13. Alex Coad & Werner Hölzl, 2009. "On the Autocorrelation of Growth Rates," Journal of Industry, Competition and Trade, Springer, vol. 9(2), pages 139-166, June.
    14. Giulio Bottazzi & Angelo Secchi & Federico Tamagni, 2014. "Financial constraints and firm dynamics," Small Business Economics, Springer, vol. 42(1), pages 99-116, January.
    15. Alex Coad & Werner Hölzl, 2012. "Firm Growth: Empirical Analysis," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 24, Edward Elgar Publishing.
    16. Daunfeldt, Sven-Olov & Elert, Niklas & Lang, Ã…sa, 2012. "Does Gibrat's law hold for retailing? Evidence from Sweden," Journal of Retailing and Consumer Services, Elsevier, vol. 19(5), pages 464-469.
    17. Harald Oberhofer, 2012. "Firm Growth, European Industry Dynamics and Domestic Business Cycles," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(3), pages 316-337, July.
    18. Dirk Burghardt & Marco Helm, 2015. "Firm growth in the course of mergers and acquisitions," Small Business Economics, Springer, vol. 44(4), pages 889-904, April.
    19. Sven-Olov Daunfeldt & Niklas Elert, 2013. "When is Gibrat’s law a law?," Small Business Economics, Springer, vol. 41(1), pages 133-147, June.
    20. Alex Coad, 2007. "A Closer Look at Serial Growth Rate Correlation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(1), pages 69-82, August.
    21. A. Arrighetti & A. Ninni, 2009. "Firm size and growth opportunities: a survey," Economics Department Working Papers 2009-EP05, Department of Economics, Parma University (Italy).

    More about this item

    Keywords

    FIW multinationals;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wfo:wstudy:34231. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Florian Mayr (email available below). General contact details of provider: https://edirc.repec.org/data/wifooat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.