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Grupo de Estudos Monetários e Financeiros

Estudos do GEMF, N.º 07 de 2003


Testing Gibrat’s Law: Empirical Evidence from a Panel of Portuguese Manufacturing Firms

(Publicado em International Journal of the Economics of Business 13(1): 65-81, 2006)

Blandina Oliveira
Superior School of Technology and Management, Polytechnic Institute of Leiria

Adelino Fortunato

Faculty of Economics, University of Coimbra

The purpose of this paper is to use Dynamic Panel Data (DPD) models to see if Gibrat’s law holds and to analyse the empirical determinants of firm growth. This paper makes significant contributions to the empirical literature on the dynamics of firm growth, since it updates the work carried out by previous researchers in this field using micro panel data and GMM estimators. To conduct this study we use an unbalanced panel of Portuguese manufacturing firms over the period from 1990 to 1999. The main implication of our findings is that firm growth is not quite random since there are some determinants which exert influence on firm growth.

JEL Classification: L11, C23.

Firm growth; Gibrat’s law; Panel data; GMM estimators.
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