Gibrat's Law

José Mata
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

Gibrat's law states that a great deal of the evolution of firm size distribution over time is due to the action of chance. While chance is still seen as an important driver of the size of firms, recent studies call for chance to be supplemented by some more structured models in order to explain the observed patterns of firm size evolution.
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How to cite this article

Mata, José. "Gibrat's Law." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 24 October 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_G000038> doi:10.1057/9780230226203.0641

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