Gibrat’s law and persistence of growth in Greek manufacturing

Fotopoulos, Georgios; Giotopoulos, Ioannis

doi:10.1007/s11187-008-9163-5

Cited by 55 publications

(30 citation statements)

References 36 publications

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“…In this context, Fotopoulos and Giotopoulos (2010) find that, for Greek manufacturing firms, Gibrat's law is rejected for micro, small, and young firms, while it holds for medium, large, and old firms. Moreover, Daunfeldt and Elert (2013) demonstrated that the more disaggregated the data analysed, the more likely Gibrat's law was to be confirmed.…”

Section: Gibrat's Law: Backgroundmentioning

confidence: 92%

Does Gibrat’s law hold for Swedish energy firms?

Tang

2014

Empir Econ

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Gibrat's law predicts that firm growth is purely random and should be independent of firm size. We use a random effects-random coefficient model to test whether Gibrat's law holds on average in the studied sample as well as at the individual firm level in the Swedish energy market. No study has yet investigated whether Gibrat's law holds for individual firms, previous studies having instead estimated whether the law holds on average in the samples studied. The present results support the claim that Gibrat's law is more likely to be rejected ex ante when an entire firm population is considered, but more likely to be confirmed ex post after market selection has "cleaned" the original population of firms or when the analysis treats more disaggregated data. From a theoretical perspective, the results are consistent with models based on passive and active learning, indicating a steady state in the firm expansion process and that Gibrat's law is violated in the short term but holds in the long term once firms have reached a steady state. These results indicate that approximately 70% of firms in the Swedish energy sector are in steady state, with only random fluctuations in size around that level over the 15 studied years.

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Section: Gibrat's Law: Backgroundmentioning

confidence: 92%

Does Gibrat’s law hold for Swedish energy firms?

Tang

2014

Empir Econ

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“…Fotopoulos and Giotopoulos (2010) find that, for Greek manufacturing firms, Gibrat's Law is rejected for micro, small, and young firms (with an inverse relation between initial firm size and firm growth), while it is accepted for medium, large, and old firms. Parker et al (2010) find that gazelle growth is significantly affected by a number of strategy variables (see also Mascarenhas et al 2002), such as using customer surveys, selling to other businesses rather than to customers directly, and-more controversially-avoiding issuing shares to workers, directors or other outside investors, and refraining from developing new products.…”

Section: Gibrat's Lawmentioning

confidence: 90%

“…However, what can be done is improving our measures and understanding of the relevant growth processes [see the papers by Parker et al (2010), Leitner and Güldenberg (2010), Bonaccorsi and Giannangeli (2010), and Fotopoulos and Giotopoulos (2010)], and the role of firm strategies in the explanation of firm growth [see the papers by Parker et al (2010), Leitner and Güldenberg (2010), and Park et al (2010)]. In the light of this progress being made, it is remarkable that Gibrat's Law still plays such a prominent role in studies of firm growth.…”

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confidence: 99%

Growth beyond Gibrat: firm growth processes and strategies

Stam

2010

Small Bus Econ

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Firm growth studies have been focused on the question of whether firm growth is independent of firm size. This shadow of Gibrat's Law has drawn attention to the randomness in firm growth. However, it has also clouded relevant research avenues that enquire into the role of firm growth processes and strategies. This paper takes stock of the current state of the art of firm growth studies in small business economics, and makes a plea for more specific research approaches that highlight the nature of the firm, organization, and growth paths. This rejuvenation of firm growth studies comprises a search for necessary mechanisms and contingent conditions for the growth of firms.

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“…Notwithstanding the abundance of primary research evidence on SME growth and performance (Fotopoulos & Giotopoulos, 2010;Macpherson & Holt, 2007;Payne, Kennedy & Davis, 2009;Stam, 2010), lack of consensus on what constitutes growth and performance as well as their antecedents remains a problem (Audretsch et al, 2014).…”

Section: Studies Two and Three Use Quantitative Analysis Obtained Fromentioning

confidence: 99%

“…Notwithstanding the abundance of primary research evidence on SME growth and performance (Davidsson, Kirchhoff, Hatemi-J & Gustavsson, 2002;Fotopoulos & Giotopoulos, 2010;Gilbert, McDougall & Audretsch, 2006;Macpherson & Holt, 2007;Payne et al, 2009;Stam, 2010), SME owners, managers and policy makers are presented with ambiguous counsel as to the how, when and what to do to ensure on-par or above aspiration level firm performance. To meet this challenge, strategy and entrepreneurship scholars provide highly fragmented and diverse theoretical perspectives with often abstract constructs.…”

Section: Introductionmentioning

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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Gibrat’s law and persistence of growth in Greek manufacturing

Abstract: Gibrat’s law, Persistence of growth, Size groups, Age groups, L11, L60, L26,

Cited by 55 publications

References 36 publications

Does Gibrat’s law hold for Swedish energy firms?

Does Gibrat’s law hold for Swedish energy firms?

Growth beyond Gibrat: firm growth processes and strategies

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

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