The Validity of Gibrat's Law: Evidence from the Service Sector in Jordan

Almsafir, Mahmoud Khalid; Nassar, Islam A.; Al-Mahrouq, Maher H.; Hayajneh, Jamal A.

doi:10.1016/s2212-5671(15)00418-9

Cited by 10 publications

(6 citation statements)

References 7 publications

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“…In addition, in both cases it can be seen that β are less than 0, which indicates that small companies have higher growth than larger companies, so Gibrat's Law is not fulfilled and, as a result, hypothesis 1 is rejected, this finding is in agreement with the results of Coad (2008), Piergiovanni (2010) and Levratto et al (2010) analysing manufacturing companies. They also fit with the findings of Daunfeldt & Elert (2013), Segarra & Teruel (2014) and Simbaña et al (2017) analyzing several economic sectors including manufacturing, and those of Daunfeledt et al (2012), Almsafir et al (2015) and Miralles (2018) analysing other economic sectors, different from manufacturing.…”

Section: Multivariate Analysissupporting

confidence: 87%

The Law of Gibrat Applied in the Manufacturing Smes of Ecuador

Simbaña-Taipe

Negrete

Navarrete

et al. 2019

GCG

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The present investigation analyses the relationship between the size of the companies and their growth in contrast to Gibrat's law, for which it analyses a sample of 2,915 Ecuadorian manufacturing companies during 2012-2016. We apply regression by quantiles for panel data in order to establish the effect of variables with business characteristics and financial performance on the company's growth measured through sales and the number of employees. The results show that smaller companies grow at higher rates than larger companies. This evidence allows us to reject Gibrat's law since there is a negative relationship between the size and growth of manufacturing companies.

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Section: Multivariate Analysissupporting

confidence: 87%

The Law of Gibrat Applied in the Manufacturing Smes of Ecuador

Simbaña-Taipe

Negrete

Navarrete

et al. 2019

GCG

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“…This is because the smaller operations have a greater propensity to generate employment at the direct level (which comprises the larger part of the total multiplier), meaning that they are more labour-intensive. Indeed, Almsarif et al (2015) found in their study that small firms in the service sector need to increase the number of employees at a faster rate than large businesses, when sales increase. Milne (1987Milne ( , 1990Milne ( , 1992, moreover, has indicated that small tourism firms have higher employment multipliers than the larger ones of the same sector.…”

Section: Discussionmentioning

confidence: 99%

Multipliers and impacts of active sport tourism in the Greek region of Messinia

2020

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Few studies on the economic impact of active sport tourism have been conducted, and these are limited to one sport. Multipliers, moreover, relate only to sport activities and not to sport tourist typologies. This article examines the economic impact of four activities (golf, windsurfing, horse riding and scuba diving) on income and employment generation in Messinia, a region in south-western Greece. Since no input–output tables are available at this local level, the ad hoc model was employed. Golf generated higher income and more employment units than the other activities, displaying all of the characteristics of a propulsive activity, a concept derived from the growth pole theory. Regarding typologies, primary sports tourists exhibit higher multipliers than tourists interested in sport in every case. The article, also, partially validates the general consensus that small tourism firms have higher total multipliers than their larger counterparts. Implications stemming from the results are discussed.

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“…A number of studies have focused on the relationship between the Þ rm growth and Þ rm size and age. The debate on what constitutes small and young Þ rm growth is still ongoing, particularly for developing and transition countries (AlmsaÞ r et al 2015;Peric and Vitezic, 2016;Santarelli & Tran, 2017;Kravchenko et al 2017). The central focus of the researchers and policymakers was to address the question "what determines the growth of SMEs?"…”

Section: Introductionmentioning

confidence: 99%

Gibrat’s law and Jovanovic’s learning theory

Krasniqi

Lajqi

2018

Ekon. pregl. (Online)

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This article tests the validity of Gibrat’s Law and Jovanovic’s learning theory for growing small and medium-sized firms (SMEs) in post-conflict economy of Kosovo. Despite evolving body of evidence suggesting that Gibrat’s Law does not hold, there is a lack of empirical evidence from transitional and post-conflict economies. This study provides econometric analysis of the relationship of age, size and growth of SMEs. The article is based on pooled SME surveys conducted by Riinvest Institute (2004- 2006). Econometric findings show that Gibrat’s Law does not hold in all model specifications while support the conventional Jovanovic’s learning theory based on growth-size age model suggesting important policy implications for promotion of small firms in Kosovo.

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The Validity of Gibrat's Law: Evidence from the Service Sector in Jordan

Cited by 10 publications

References 7 publications

The Law of Gibrat Applied in the Manufacturing Smes of Ecuador

The Law of Gibrat Applied in the Manufacturing Smes of Ecuador

Multipliers and impacts of active sport tourism in the Greek region of Messinia

Gibrat’s law and Jovanovic’s learning theory

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