Title

Firm dynamics of international joint ventures in Shanghai's manufacturing sector: Testing the validity of Gibrat's Law

Document Type

Journal article

Source Publication

Journal of Applied Business Research

Publication Date

1996

Volume

12

Issue

4

First Page

20

Last Page

27

Abstract

How joint ventures (JV) grow over time has important implications on government JV policies and enterprises' decisions in JV formation. A paper studies JVs in the manufacturing industries of Shanghai by analyzing the empirical relationship between the size of JVs with their growth over time. Whether Gibrat's Law can describe the dynamic behavior of JVs is tested by using the panel data of 4 Shanghai industries from 1989 to 1992. Two empirical results are obtained: 1. Small JVs are better in creating jobs than large JVs. 2. In terms of output growth, both small and large JVs follow a simple stochastic growth process which is more or less dictated by the Gibrat's Law.

DOI

10.19030/jabr.v12i4.5781

Print ISSN

08927626

Publisher Statement

Copyright Journal of Applied Business Research Fall 1996

Full-text Version

Publisher’s Version

Recommended Citation

Chow, C.K.W., & Fung, M.K.Y. (1996). Firm dynamics of international joint ventures in Shanghai's manufacturing sector: Testing the validity of Gibrat's law. Journal of Applied Business Research, 12(4), 20-27.