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Firm Growth and Scaling of Growth Rate Variance in Multiplant Firms

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  • Alex Coad

    (Max Planck Institute of Economics, Jena, Germany; Centre d'Economie de la Sorbonne, Equipe MATISSE, Univ. Paris 1 - CNRS)

Abstract

While Gibrat's Law assumes that growth rate variance is independent of size, empirical work has usually found a negative relationship between growth rate variance and ï¬ rm growth. Using data on French manufacturing ï¬ rms, we observe a relatively low, but statistically signiï¬ cant, negative relationship between ï¬ rm size and growth rate variance. Furthermore, we observe that growth rate variance does not decrease monotonically the more plants a ï¬ rm possesses, which is at odds with a number of theoretical models.

Suggested Citation

  • Alex Coad, 2007. "Firm Growth and Scaling of Growth Rate Variance in Multiplant Firms," Jena Economics Research Papers 2007-101, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2007-101
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    References listed on IDEAS

    as
    1. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.
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    Cited by:

    1. Calvino, Flavio & Criscuolo, Chiara & Menon, Carlo & Secchi, Angelo, 2018. "Growth volatility and size: A firm-level study," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 390-407.
    2. Stefania Vitali & Mauro Napoletano & Giorgio Fagiolo, 2013. "Spatial Localization in Manufacturing: A Cross-Country Analysis," Regional Studies, Taylor & Francis Journals, vol. 47(9), pages 1534-1554, October.
    3. Alex Coad & Tom Broekel, 2012. "Firm growth and productivity growth: evidence from a panel VAR," Applied Economics, Taylor & Francis Journals, vol. 44(10), pages 1251-1269, April.
    4. Fabio Pieri, 2018. "Vertical organization of production and firm growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(1), pages 83-106.
    5. Aziza GARSAA & Nadine LEVRATTO, 2017. "Les disparités d’évolution de l’emploi sont-elles dues à la nature des entreprises ou à leur localisation ? Une analyse multiniveaux sur les zones d’emploi françaises," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 45, pages 31-58.
    6. 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.

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    More about this item

    Keywords

    Growth rate variance; Firm growth; Scaling relationship; Multiplant ï¬ rms; Gibrat's Law;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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