Gibrat's Rule of Proportionate Growth

Discipline: Economics

Named after French economist ROBERT GIBRAT (1904-1980) (and sometimes called Gibrat's Law), Gibrat's rule of proportionate growth states that the proportional change in the size of a company in an industry is the same for all such companies irrespective of their original size.

If a company with sales of $10m doubles in size over a period of time, it is likely the same will happen for a company beginning with sales of only $1m.

Source:
R Gibrat, Les inigalitis iconomiques (Paris, 1931)

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