Do growth rates depend on the initial firm size? Evidence for the German agribusiness

Julia Höhler; Rainer Kühl

doi:10.22004/ag.econ.284980

Do growth rates depend on the initial firm size? Evidence for the German agribusiness

Julia Höhler^*, Rainer Kühl

^*Corresponding author for this work

Research output: Contribution to journal › Article › Academic › peer-review

Abstract

The agribusiness is in flux: how will the population of firms develop, and which consequences will arise for competition? In 1931, GIBRAT stated the firm size and growth rate to be independent. Testing the validity of Gibrat's Law for the agribusiness allows drawing conclusions on future developments of concentration. After the examination of 454 manufacturing downstream enterprises in Germany, we reject Gibrat's Law and find small firms to grow stronger than bigger firms in relation to their initial size. Our results emphasize the application of Gibrat's Law to subsectors and size classes as well as to the agribusiness as a whole.

Original language	English
Pages (from-to)	231-243
Number of pages	13
Journal	German Journal of Agricultural Economics
Volume	65
Issue number	4
DOIs	https://doi.org/10.22004/ag.econ.284980
Publication status	Published - Dec 2016
Externally published	Yes

Keywords

Agribusiness
Empirical growth
Structural change

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10.22004/ag.econ.284980

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abstract = "The agribusiness is in flux: how will the population of firms develop, and which consequences will arise for competition? In 1931, GIBRAT stated the firm size and growth rate to be independent. Testing the validity of Gibrat's Law for the agribusiness allows drawing conclusions on future developments of concentration. After the examination of 454 manufacturing downstream enterprises in Germany, we reject Gibrat's Law and find small firms to grow stronger than bigger firms in relation to their initial size. Our results emphasize the application of Gibrat's Law to subsectors and size classes as well as to the agribusiness as a whole.",

keywords = "Agribusiness, Empirical growth, Structural change",

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language = "English",

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T1 - Do growth rates depend on the initial firm size? Evidence for the German agribusiness

AU - Höhler, Julia

AU - Kühl, Rainer

PY - 2016/12

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N2 - The agribusiness is in flux: how will the population of firms develop, and which consequences will arise for competition? In 1931, GIBRAT stated the firm size and growth rate to be independent. Testing the validity of Gibrat's Law for the agribusiness allows drawing conclusions on future developments of concentration. After the examination of 454 manufacturing downstream enterprises in Germany, we reject Gibrat's Law and find small firms to grow stronger than bigger firms in relation to their initial size. Our results emphasize the application of Gibrat's Law to subsectors and size classes as well as to the agribusiness as a whole.

AB - The agribusiness is in flux: how will the population of firms develop, and which consequences will arise for competition? In 1931, GIBRAT stated the firm size and growth rate to be independent. Testing the validity of Gibrat's Law for the agribusiness allows drawing conclusions on future developments of concentration. After the examination of 454 manufacturing downstream enterprises in Germany, we reject Gibrat's Law and find small firms to grow stronger than bigger firms in relation to their initial size. Our results emphasize the application of Gibrat's Law to subsectors and size classes as well as to the agribusiness as a whole.

KW - Agribusiness

KW - Empirical growth

KW - Structural change

U2 - 10.22004/ag.econ.284980

DO - 10.22004/ag.econ.284980

M3 - Article

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JO - German Journal of Agricultural Economics

JF - German Journal of Agricultural Economics

IS - 4

ER -

Do growth rates depend on the initial firm size? Evidence for the German agribusiness

Abstract

Keywords

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