The present paper deals with the question whether "Gibrat's law" is applicable to Italian mechanical companies active between 1997 and 1999 or not. The analysis was carried out at a spatial level splitting companies in four macro-regions: North-West. North-East. Centre and South. On the basis of a set of descriptive and inferential tools, we find that firm size, measured hy total assets, follows approximately a log-normal distribution in at least two of the four analyzed macro-regions. Nevertheless log-normality is only one necessary but not sufficient condition for the validity of the Gibrat's law. Thus we analyzed the influence of firm size on growth rate finding a negative relation between the two variables in all macro-regions. This is a clear violation of Gibrat's law. Another violation was found by the application of an econometric model which evidences the persistence of growth
TESTING GIBRAT’S LAW IN ITALIAN MACRO-REGIONS: ANALYSIS ON A PANEL OF MECHANICAL COMPANIES / Ganugi, P.; Grossi, L. .; Gozzi, Giorgio. - In: STATISTICAL METHODS & APPLICATIONS. - ISSN 1618-2510. - 14. 1:(2005), pp. 101-126.
TESTING GIBRAT’S LAW IN ITALIAN MACRO-REGIONS: ANALYSIS ON A PANEL OF MECHANICAL COMPANIES
GANUGI P.;GOZZI, Giorgio
2005-01-01
Abstract
The present paper deals with the question whether "Gibrat's law" is applicable to Italian mechanical companies active between 1997 and 1999 or not. The analysis was carried out at a spatial level splitting companies in four macro-regions: North-West. North-East. Centre and South. On the basis of a set of descriptive and inferential tools, we find that firm size, measured hy total assets, follows approximately a log-normal distribution in at least two of the four analyzed macro-regions. Nevertheless log-normality is only one necessary but not sufficient condition for the validity of the Gibrat's law. Thus we analyzed the influence of firm size on growth rate finding a negative relation between the two variables in all macro-regions. This is a clear violation of Gibrat's law. Another violation was found by the application of an econometric model which evidences the persistence of growthFile | Dimensione | Formato | |
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