Does Gibrat’s Law Hold? Evidence from Canadian Retail and Manufacturing Firms

Petrunia, Robert J.

doi:10.1007/s11187-006-9042-x

Cited by 38 publications

(15 citation statements)

References 25 publications

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“…As for the control variable in the organizational level, and given the strong relationship between growth intention and realized growth, we must include a control for firm size, in terms of number of employees (SIZE). Although Gibrat (1931) postulates a statistical independence between firm size and firm growth, subsequent research in firm growth, however, does not generally confirm this independence (e.g., Evans, 1987;Petrunia, 2008), so it may be relevant to include it in our model. Sectorial characteristics have also been considered, specifically the perception of the level of competition in the sector (COMPET) (Dutta & Thornhill, 2008).…”

Section: Variablesmentioning

confidence: 94%

An international study of the factors explaining high-growth expectation in new ventures: a gender perspective

Arroyo

Fuentes

Jiménez

2016

RBGN

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Purpose -Given the importance of high-impact entrepreneurship to economic growth, and the remarkable potential that women entrepreneurs have yet to contribute to the economic activity, in this study we propose a model to explain an entrepreneur's high-growth expectation based on relevant strategic variables, additionally addressing the identification of possible gender differences in the predictors of an entrepreneur's expectation for high-growth.Design/methodology/approach -We use data from the 2009 Global Entrepreneurship Monitor (GEM), working on a sample of 8,641 earlystage entrepreneurs referred to 49 countries. We perform hierarchical binomial logistic regressions, including a segmented analysis to compare the model between women and men entrepreneurs.Findings -Based on our results, we confirm gender as a strong explanatory variable for growth aspirations, with women having lower levels of expectation for the high-growth of their ventures. Moreover, in comparing the determinants of high-growth expectation by gender, we can conclude that the set of significant predictors is not the same for male and female entrepreneurs. These results suggest a moderating effect of gender in shaping the configuration of the factors determining an entrepreneur's propensity for high-growth.Originality/value -This research contributes to a better understanding of the factors driving high-growth expectation, thus helping to advance knowledge in the area of strategic entrepreneurship, as well as in women's entrepreneurship literature. As for practical implications, our results point out to the necessity of designing specific policies for men and women, in order to promote high-growth entrepreneurship.

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Section: Variablesmentioning

confidence: 94%

An international study of the factors explaining high-growth expectation in new ventures: a gender perspective

Arroyo

Fuentes

Jiménez

2016

RBGN

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“…To test the random growth hypothesis, scholars examined the validity of the argument that firm size has no predictive relationship with future growth as Gibrat's law states that growth rate is independent of firm size. A general consensus in the results indicates that the random growth hypothesis does not hold for small firms in that on average they consistently tend to grow faster than larger firms (Axtell, 2001;Calvo, 2006;Coad, 2009;Contini & Ravelli, 1989;de Wit, 2005;Dunne & Hughes, 1994;Evans, 1987aEvans, , 1987bGeroski, 1995;Hart & Oulton, 1996;Luttmer, 2010;Petrunia, 2008;Sutton, 1997). Simon and Bonini (1958) provided one of the earliest explanations for this anomaly in postulating that the law of proportional effect only holds for firms in an industry operating above a minimum efficient scale.…”

Section: Defying Gibrat's Law: Industry Minimum Efficient Scale and Gmentioning

confidence: 99%

SME performance: the role of networking, innovation breadth, and business model design

Gronum¹

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Because small and medium-sized enterprises (SMEs) are pivotal to the health and vibrancy of economies, it is crucial for researchers to understand the factors that significantly underlie SME performance. Two of the most widely identified antecedents to SME performance are innovation and networking. However, despite widespread attention, the theoretical and empirical status of the relationships between innovation, networks and SME performance remain uncertain. Some researchers note that claims regarding a direct positive relationship between innovation and networks with performance fail to adequately account for the variables that mediate this relationship.In contrast, while much research has been undertaken into the performance benefits of innovation and networks, the exponential increase in the number of publications heralding the performance benefits of business model design and business model innovation received very scant empirical support, almost non-existent for SMEs. Business model design is seen as a powerful mechanism for unlocking and enhancing the value of business processes, including innovation.Empirical evidence presented in this thesis tangibly supports this assertion and thus creates a more solid foundation for future development of the business model view of the firm.The purpose of this thesis, comprising four studies, is to theorise and research the nature of the relationship between innovation breadth, networks and business model design with SME performance. The central research question of this thesis asks: How do innovation breadth, networks and business model design relate to SME performance?Study One systematically reviews a large sample of SME growth and performance literature to identify and interpret emergent concepts, themes, trends and gaps. Study One backgrounds the three empirical studies that that follow to argue, using Resource-Based Theory, that the resources required for developing competitive advantage are both physical and intangible; of the two, intangible resources have the greatest strategic potential. In other words, the thesis finds that SMEs lacking physical resources could develop more sustainable competitive advantage by relying more heavily on leveraging path dependent, socially complex, and causally ambiguous intangible resources. Social capital and technological competence, associated with networks and innovation, represent highly desired intangible resources. Business model design organises these resources to create value for the customer. Therefore, innovation across the elements of the business model when designing or reconfiguring the SME's business model acts as dynamic capabilities that enhance SME performance.iii The systematic literature review is followed by three empirical studies that use longitudinal and cross-sectional datasets of Australian SMEs. Study Two introduces the concept of innovation breadth, as the number of distinct types of innovation that firms use, or their innovation diversity, and examines the linearity and temporality of its re...

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“…Some authors (e.g., Audretsch et al. ; Petrunia ) suggest empirically that the results may be different for services, whereas others (e.g., Lotti ) find scant differences. In any case, for Audretsch et al.…”

Section: The Hypotheses and Their Justificationmentioning

confidence: 99%

Managerial Performance Differences between Labor-Owned and Participatory Capitalist Firms

Arcelus¹,

Melgarejo²,

Simon³

2013

Journal of Small Business Management

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This paper tests for differences in the managerial performance of micro and small firms, classified by capital‐ownership configuration, be they labor‐owned or participatory capitalist firms. Measures of managerial performance comprise indices of economic performance, profitability, financial structure, worker remuneration, and solvency. Explanators of these differences include the age of the firm, its economic sector of operations, its capital‐ownership configuration and an ordinal measure of strategic risk. The evidence rejects Gibrat's law of proportional effects, in favor of the life cycle hypothesis. It also leads to inconclusive short‐term effects and to a nondifferential role of the type of key capital‐ownership configuration in a firm's long‐term prospects.

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Does Gibrat’s Law Hold? Evidence from Canadian Retail and Manufacturing Firms

Abstract: firm growth, retail trade, manufacturing, Gibrat’s Law, D21, L11, L60, L80, L26,

Cited by 38 publications

References 25 publications

An international study of the factors explaining high-growth expectation in new ventures: a gender perspective

An international study of the factors explaining high-growth expectation in new ventures: a gender perspective

SME performance: the role of networking, innovation breadth, and business model design

Managerial Performance Differences between Labor-Owned and Participatory Capitalist Firms

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