Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus
The Growth Opportunities for SMEs?
(), Erik StrÝjer Madsen
() and Valdemar Smith
Abstract: The extensive empirical literature on the validity of
Gibratís law does not in general verify the law as it finds that firmsí
growth rates are negatively correlated with both firm size and age.
However, some studies find that Gibratís law holds for sub-samples of firms
such as large firms or firms belonging to special industries. It has been
pointed out that these results are due to the fact that the likelihood of
firm survival for natural reasons is positively related to firm size and
age. This study uses a relatively large and representative sample of Danish
firms to evaluate the validity of Gibratís law for different kinds of firms
over the period 1990 - 2003. In contrast to the majority of earlier studies
our analysis corrects for the bias in the estimations by using variables
related to the survival of small firms.
Keywords: Market Structure; Firm Strategy; Market Performance; (follow links to similar papers)
JEL-Codes: L10; (follow links to similar papers)
23 pages, September 27, 2006
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