Corporate Growth Convergence in Europe

31 Pages Posted: 26 Jun 2001

See all articles by Paul A. Geroski

Paul A. Geroski

London Business School; Centre for Economic Policy Research (CEPR)

Klaus Peter Gugler

Vienna University of Economics and Business; European Corporate Governance Institute (ECGI)

Date Written: June 2001


It is widely believed that the implementation of the Single Market Programme in 1992 has had an impact on national markets in Europe, and some people have argued that it has induced a convergence in industrial structures across countries. Using a newly available database, however, covering nearly every firm above 100 employees in 14 European countries over the time period 1994 to 1998, we do not find strong evidence for 'convergence' in manufacturing in Europe. 'Full' convergence in corporate sizes within industries is unambiguously rejected by the data, although there may be some industries where some form of conditional convergence is observed. A Gibrat process best describes the growth of very large and mature firms; but smaller and younger firms depart from this prediction. While we can identify significant correlates of growth such as firm size, age or the internal organization of the firm, most of the variation in corporate growth remains unpredictable.

Keywords: Corporate growth, convergence, Europe, Gibrat's Law

JEL Classification: L10

Suggested Citation

Geroski, Paul A. and Gugler, Klaus Peter, Corporate Growth Convergence in Europe (June 2001). Available at SSRN:

Paul A. Geroski (Contact Author)

London Business School ( email )

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Centre for Economic Policy Research (CEPR)

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Klaus Peter Gugler

Vienna University of Economics and Business ( email )

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Vienna, Wien 1020


European Corporate Governance Institute (ECGI)

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