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Article
Publication date: 1 February 1993
Gibrat's Law of Proportionate Effect is reconsidered by assuming a process of stochastic growth and decline of firms in an industry. With the assistance of computer simulations it…
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Abstract
Gibrat's Law of Proportionate Effect is reconsidered by assuming a process of stochastic growth and decline of firms in an industry. With the assistance of computer simulations it is shown that such a process leads to an even more skewed size distribution of firms than a random process of growth only.