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Advisor(s)
Abstract(s)
Using a dynamic panel model, this article shows that Gibrat’s Law does not
find empirical evidence in large Portuguese companies. The growth of large
Portuguese companies depends positively on growth in the previous period, and
negatively on size and level of debt. The results show large Portuguese companies to
be around the optimum size and consequently, debt is used to discipline management,
avoiding investment in projects which would make companies grow beyond their ideal
size, jeopardising the income of shareholders or owners.
Description
Keywords
Gibrat’s Law Growth Large Companies Dynamic Panel Data