Was Robert Gibrat right? A test based on the graphical model methodology

Marco Guerzoni, Luigi Riso, Marco Vivarelli

Research output: Working paper / PreprintWorking paper

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Using both regression analysis and an unsupervised graphical model approach (never applied before to this issue), we confirm the rejection of the Gibrat’s law when our firm-level data are considered over the entire investigated period, while the opposite is true when we allow for market selection. Indeed, the growth behavior of the re-shaped (smaller) population of the survived most efficient firms is in line with the Law of Proportionate Effect; this evidence reconciles early and current literature testing Gibrat’s law and may have interesting implications in terms of both applied and theoretical research.

Original languageEnglish
Publication statusPublished - 9 Mar 2023
Externally publishedYes

Publication series

SeriesUNU-MERIT Working Papers

JEL classifications

  • l11 - "Production, Pricing, and Market Structure; Size Distribution of Firms"
  • d92 - Intertemporal Firm Choice and Growth, Financing, Investment, and Capacity


  • Gibrat’s Law
  • firm growth
  • market selection
  • firm survival

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