|Testing Gibrat’s Law: An Empirical Evidence from Indian Industry|
|Priyanka Aggarwal* and Subhash Chander**
Department of Commerce & Business Management, Guru Nanak Dev University,
Amritsar - 143005, Punjab, India
*E-mail: email@example.com, **E-mail: firstname.lastname@example.org
According to Gibrat’s law of Proportionate Effect, the growth rate of a given firm is independent of its size at the beginning of the examined period. The objective of this paper is to empirically analyze the pattern of corporate growth for an emerging economy, namely India. Balanced time series data of approximately 300 firms over the years 1991-92 to 2005-06 has been used to explore the size and growth relationship. The size of a firm has been measured in terms of net sales, total assets, and market capitalization. The data for various attributes has been taken from ‘PROWESS’ a database of CMIE. SPSS 10.05 has been used to perform the statistical applications.
Keywords: Gibrat’s Law, Growth, Size, Indian Industry.