Economic Research and Perspectives

Economic Research and Perspectives

Firm growth dynamics in Iranian insurance industry

Author
Ahmad Sadraei Javaheri
Department of Economics, Shiraz University Sadraei@Shirazu.ac.ir
Abstract
Traditional approach to the firm size and its growth rate is based on comparative statics analysis and it does not really deal with the dynamics of growth. This paper takes a dynamic approach to investigate the relationship between firm size and its growth rate for Iranian insurance firms during 2003-2009. The study applies two ways to verify the validity of Gibrat's law in Iranian insurance industry. First way is to consider the independence of two important attributes of firms including firm size and growth rates. The second way is based on panel regression estimation. The results of the study reject the validity of Gibrat’s law and indicate the fact that small firms grow faster than their larger counterparts.
Keywords
Firm Size Distribution
firm growth
panel regression
insurance firms
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Economic Research and Perspectives
Volume 13, Issue 2
Summer 2013
Pages 175-185