Abstract
This study examines Gibrat’s law regarding size–growth relationships in the consumer-to-consumer (C2C) online marketplace. Using dynamic panel data models, we analyze 21,948 e-merchants from 14 industries on Taobao.com. The data analysis shows that Gibrat’s law holds for large and mature stores when their size and age exceed certain threshold, but it generally fails to apply to stores whose size and age are below certain threshold. For those small stores, they grow faster than large ones in the C2C e-commerce. Results of the study provide insights into the competitive dynamics and industry structure of the C2C online marketplace.
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