Testing Gibrat’s law: empirical evidence from panel unit root tests of turkish firms

Aslan, Alper (2008): Testing Gibrat’s law: empirical evidence from panel unit root tests of turkish firms. Published in: International Research Journal of Finance and Economics , Vol. June, No. 16 (June 2008)

Abstract

The purpose of this paper is to use panel unit root tests to see if Gibrat’s law holds in Turkey. Gibrat's Law establishes that firm growth is a random walk, it means that the probability of a given proportional change in size during a specified period is the same for all firms in a given industry. In this paper, it is examined Gibrat law in Turkey empirically by using Chen & Lu (2003) methodology and use the panel unit root method to investigate the relation between firm size and firm growth. Since it has been observed that many panel unit root tests are invalid when cross-section correlation problem and also finds that conclusion is not the same.

• Item Type: MPRA Paper
• Language: English
• Keywords: Gibrat’s Law, Firm Growth, MADF Test
• Subjects: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L20 - General

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