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Testing Gibrat's Law on Software Companies in Croatia
Last modified: 2014-07-10
Abstract
According to Gibrat's law of proportionate effect, a company's growth rate is independent of its size at the start of the observation period. The main purpose of this paper is to test the validity of this assumption in the case of Croatian companies that offer the services of software consultancy and supply (NKD 2002; 72.2).
In order to examine the validity of Gibrat’s law for the constant sample of all surviving companies, we used the quantile regression method. For all analysed periods, our results show that a company's growth is independent of its size.
In order to examine the validity of Gibrat’s law for the constant sample of all surviving companies, we used the quantile regression method. For all analysed periods, our results show that a company's growth is independent of its size.