The law of Gibrat applied in the manufacturing SMEs of Ecuador

  1. Luis Enrique Simbaña Taipe 2
  2. Gabriela Estefanía Vargas Negrete 2
  3. Alexandra Morales Navarrete 2
  4. María Jesús Rodríguez Gulías 3
  5. David Rodeiro Pazo 1
  1. 1 Universidade de Santiago de Compostela
    info

    Universidade de Santiago de Compostela

    Santiago de Compostela, España

    ROR https://ror.org/030eybx10

  2. 2 Escuela Politécnica del Ejército
    info

    Escuela Politécnica del Ejército

    Sangolquí, Ecuador

    ROR https://ror.org/05j136930

  3. 3 Universidade da Coruña
    info

    Universidade da Coruña

    La Coruña, España

    ROR https://ror.org/01qckj285

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Journal:
GCG: revista de globalización, competitividad y gobernabilidad

ISSN: 1988-7116

Year of publication: 2019

Volume: 13

Issue: 1

Pages: 34-49

Type: Article

DOI: 10.3232/GCG.2019.V13.N1.01 DIALNET GOOGLE SCHOLAR lock_openDialnet editor

More publications in: GCG: revista de globalización, competitividad y gobernabilidad

Abstract

The present investigation analyses the relationship between the size of the companies and their growth in contrast to Gibrat's law, for which it analyses a sample of 2,915 Ecuadorian manufacturing companies in the period 2012-2016. We apply regression by quantiles for panel data in order to establish the effect of variables with business characteristics and financial performance on the company's growth measured through sales and the number of employees. The results show that smaller companies grow at higher rates than larger companies. This evidence allows us to reject Gibrat's law since there is a negative relationship between the size and growth of manufacturing companies.

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