The relationship between size and growth: the case of Chinese listed companies

Abstract

To extend the research on Gibrat's law in transformational countries, this article uses quantile regression to test whether the Law holds for Chinese listed companies in six industries from 1997 to 2003. Results indicate that Gibrat's law demonstrated a behaviour dependent on the length examined. Although it was rejected in four out of six industries for the 6-year period, it received strong support in five industries year by year, which implied that size convergence was a slow process in China. Results also show that Gibrat's law is conditional on industrial characters. It received unbalanced support from different industries, suggesting that the industries examined had distinct growth trajectories.