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Ekonomik Yaklasim. 2011; 22(80): 19-38

The Relation Between Firm Size and Size Growth Rate in European Carbonate Drinks Market

Murat ATAN, Emre Güneşer BOZDAĞ.

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The aim of the study is whether Gibrat’s Law is true if applied on the carbonate soft drink markets in Eastern and Western Europe. The Gibrat’s Law means that the size increasing rate is not depend on the size of fırms but randomly. It is tried to estimate the esence of the relationships between the initial size growth and growth rate of the firms, by using static mathod GMM and dynamic Arellano Bond panel. In static GMM it is not found a meaningful relations for Western European carbonate soft drinks firms but for Eastern European firms is. Even if, in Eastern Europe, there is a relation between size and size growth rate, which is different from Gibrat’s Law. Small size firms are more dynamic for growing than the large size firms, not randomly. In dynamic Arellano Bond model it is not meaningful to test the Gibrat’s Law. In the study the firm ’s size concept is limited with the sum of the sales valued in US Dollar for each of the firms.

Key words: Gibrat’s Law, Firm Size, Concentration, GMM, Arellano Bond Dynamic Panel. JEL Classification: C23, D20, D40, L11, L66.

Article Language: Turkish English

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