An Investigation on the Relationship between Firm Size and Firm Growth in Iranian Food and Beverage Industries

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Abstract

The study examines the relationship between the size of firms and their growth in Iranian food and beverages industries. The study utilizes Iranian industrial data, classified on the base of ISIC with 4-digit code. The study evaluates the validity of Gibrat's Law in the selected firms. The validity of the law has been examined by two methods. First, the panel analysis is applied and second, the existence of lognormal distribution of firm size has been tested. The results do not confirm the validity of the Law and indicate the fact that firm size is not log-normally distributed. The results show negative impact of firm size on the growth.
JEL Classification: L25, D92, C23, L11, L66

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