Firm size and growth in Sweden's life insurance market between 1855 and 1947: a test of Gibrat's law

Mike Adams, Lars Fredrik Andersson, Philip Hardwick, Magnus Lindmark

Research output: Contribution to journalArticle

7 Citations (Scopus)
144 Downloads (Pure)

Abstract

Using data for the period from 1855 to 1947 and the two sub-periods, 1855-1902 and 1903-47, the article examines whether the organic growth rates of 38 Swedish life insurance firms are independent of size, as predicted by Gibrat's (1931) Law of Proportionate Effects. Using panel unit root tests and panel Generalised Method of Moments (GMM) regression, the article finds a significant difference between the growth rates of small and large Swedish life insurance firms (with smaller firms tending to grow faster than larger firms), a result that clearly contradicts Gibrat's Law as a long-run tendency in the Swedish life insurance sector. significant influences were also found on firm growth from profitability, organisational form, reinsurance, the real rate of interest and the Swedish regulatory environment.
Original languageEnglish
Pages (from-to)956-974
Number of pages19
JournalBusiness History
Volume56
Issue number6
Early online date9 Dec 2013
DOIs
Publication statusPublished - 2014

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