Gibrat’s Law and diversification
This article presents an analysis of the growth patterns of the worldwide top 200 firms in the pharmaceutical industry. A test of the Gibrat’s Law of Proportionate Effect is performed and we find, in line with previous literature, a violation concerning the variance of growth. Using disaggregated da...
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| Veröffentlicht in: | Industrial and corporate change 2006-10, Vol.15 (5), p.847-875 |
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| container_title | Industrial and corporate change |
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| creator | Bottazzi, Giulio Secchi, Angelo |
| description | This article presents an analysis of the growth patterns of the worldwide top 200 firms in the pharmaceutical industry. A test of the Gibrat’s Law of Proportionate Effect is performed and we find, in line with previous literature, a violation concerning the variance of growth. Using disaggregated data on sub-markets, we are however able to show that this violation can be completely accounted for by a diversification effect, namely a scale relation between the number of sub-markets in which a firm is active and its size. To interpret these findings, we propose a stochastic branching model of firm diversification consistent with a notion of cumulative corporate competences. |
| doi_str_mv | 10.1093/icc/dtl019 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0960-6491 |
| ispartof | Industrial and corporate change, 2006-10, Vol.15 (5), p.847-875 |
| issn | 0960-6491 1464-3650 |
| language | eng |
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| source | PAIS Index; Business Source Complete; OUP_牛津大学出版社现刊 |
| subjects | Central limit theorem Classification Corporate culture Corporate growth Corporate planning Correlation analysis Diversification Enterprises Impact analysis Industry International Law Mathematical methods Pharmaceutical industry Stochastic models Studies |
| title | Gibrat’s Law and diversification |
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