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http://ssrn.com/abstract=370948
 
 

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Gibrat's Law: Are the Services Different?


David B. Audretsch


Indiana University - Institute for Development Strategies; King Saud University; WHU - Otto Beisheim School of Management; Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Luuk Klomp


Erasmus Research Institute of Management (ERIM)

Roy Thurik


Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC); Erasmus Research Institute of Management (ERIM); EIM Netherlands - Business and Policy Research; Tinbergen Institute

22 2002 1,

ERIM Report Series Reference No. ERS-2002-04-STR

Abstract:     
Several noted surveys on intra-industry dynamics have recently reached the conclusion from a large body of evidence that Gibrat's Law does not hold. However, almost all of these studies have been based on manufacturing. There are compelling reasons to doubt whether these findings hold for the services. In this paper we examine whether the basic tenet underlying Gibrat's Law - that growth rates are independent of firm size - can be rejected for the services as it has been for manufacturing. Based on a large sample of Dutch firms the evidence suggests that growth rates are, in fact, independent of firm size. Validation of Gibrat's Law in the services suggests that the dynamics of industrial organisation for services may not simply mirror that for manufacturing.

Number of Pages in PDF File: 30

Keywords: firm growth, service industries, Gibrat's Law

JEL Classification: M, L20, D21

working papers series





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Date posted: February 21, 2003  

Suggested Citation

Audretsch, David B. and Klomp, Luuk and Thurik, Roy, Gibrat's Law: Are the Services Different? (22 2002 1,). ERIM Report Series Reference No. ERS-2002-04-STR. Available at SSRN: http://ssrn.com/abstract=370948

Contact Information

David B. Audretsch (Contact Author)
Indiana University - Institute for Development Strategies ( email )
1315 East Tenth Street
Bloomington, IN 47405
United States
812-855-6766 (Phone)
812-855-0184 (Fax)
King Saud University ( email )
Riyadh, 11451
Saudi Arabia
WHU - Otto Beisheim School of Management ( email )
Burgplatz 2
Vallendar, 56179
Germany
Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )
1315 East Tenth Street
Bloomington, IN 47405
United States

Luuk Klomp
Erasmus Research Institute of Management (ERIM) ( email )
P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1517 (Phone)
+31 10 452 2028 (Fax)
Roy Thurik
Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC) ( email )
3000 DR Rotterdam
Netherlands
+31 10 408 2232 (Phone)
+31 10 408 9146 (Fax)
HOME PAGE: http://www.thurik.com
Erasmus Research Institute of Management (ERIM) ( email )
P.O. Box 1738
3000 DR Rotterdam
Netherlands
EIM Netherlands - Business and Policy Research
Postbus 7001
2701 AA Zoetermeer
Netherlands
+31 79 341 3634 (Phone)
+31 79 331 3742 (Fax)
Tinbergen Institute ( email )
Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands
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