Determinants of Firm Growth: Empirical Evidence from Swiss Listed Companies

Costa, Marcio Genovevo da; Donner, Nils

doi:10.2139/ssrn.2995522

Cited by 2 publications

(3 citation statements)

References 46 publications

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“…The sector in which a firm operates codetermines importantly its growth dynamics (Burger et al, 2013). A better economic performance has been detected in sectors of financial nature due to the high financial leverage, or of high technology due to the rapidly enhancing innovation in this sector (DeAngelo and Stulz, 2013;Genovevo da Costa et al, 2017). In other studies, it has been evidenced that sector effects are present but play a minor role (Stierwald, 2009).…”

Section: Literature Review 21 the Determinants Of Firm Profitabilitymentioning

confidence: 99%

“…Nevertheless, conclusions are not consistent as the analyses arrived at different conclusions. On the one hand, a positive effect of firm size on profitability emanated from the explosion of economies of scale and of economies of scope, the lower cost to access capital than smaller firms, the generation of higher income, the better access to capital markets or the lower cost of borrowing (Titman and Wessels, 1988;Barbosa and Louri, 2005;Stierwald, 2009;Argyrou et al, 2016;Genovevo da Costa et al, 2017). On the other hand, studies have found a non-important (Ha-Brookshire, 2009) or a negative effect of firm size on profitability (Zhou and de Wit, 2009;Yasuda, 2005;Almus and Nerlinger, 2000;Bottazzi and Secchi, 2006;Calvo, 2006;Dunne and Hughes, 1994;Goddard et al, 2002), which is due to increased monitoring costs, bureaucratisation, policies based on non-pecuniary benefits, diseconomies of scale or diversified production structure (Glancey, 1998;Barbosa and Louri, 2005).…”

Section: Literature Review 21 the Determinants Of Firm Profitabilitymentioning

confidence: 99%

“…The performance and response of firms in any internal or external stimuli differentiate substantially from sector to sector (Genovevo da Costa et al, 2017). With the aim to disentangle these different effects and to capture any industry-specific influences, a series of dummy variables was included in the econometric model defined according to the sectors of OECD classification, that is, the sectors of resource-and labour-intensity, of scale-and specialised-intensity, of science-intensity and the sector of services (RESLAB, SCSPEC, SCIEN and SERV respectively).…”

Section: Econometric Analysismentioning

confidence: 99%

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Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

Tsiapa

2021

EJMBE

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PurposeThe unprecedented economic crisis in Greece deeply affected entrepreneurship, which was traditionally characterised by low levels of innovation and competitiveness, the dominant presence of micro-sized enterprises and the weak signs of prosperity in large firms. This paper, in acknowledgement of the necessary transformations that production incurred due to the crisis, attempts to detect the characteristics of large manufacturing firms that contributed to their greater resilience during the unstable period of 2011–2016 by analysing the determinants of the higher profitability of firms. The analysis shows that firms that improved their productivity and sales levels and in parallel are flexible, in the sense that they have limited amounts of both assets and liabilities and thus a small risk, are those that presented higher profits during the period under study. Initial conditions, sectoral characteristics and the broader national environment do not seem to have a strong contributive role in firms' profitability.Design/methodology/approachThe analysis follows a dynamic system generalised method of moments (GMM) estimation based on a panel data set of 125 Greek large firms over the time span 2011–2016.FindingsThe analysis shows that firms that improve their productivity and sales levels and in parallel are flexible, in the sense that they have a limited amount of both assets and liabilities and thus a small risk, are those that present higher profits during the period under study. Initial conditions, sectoral characteristics and the broader national environment do not seem to have a strong contributive role in firms' profitability.Research limitations/implicationsThe present paper attempts to explain the performance of the most dynamic large manufacturing firms in Greece by investigating the role of some of the most important determinants of firm profitability (according to data availability), acknowledging, however, some analysis' limitations as the absence of some other parameters like the export activity or the incorporation of any innovative features in the firmsOriginality/valueThe novelty of this paper lies in two points. First, the subject of the analysis is the large firms in Greece, which have not received much attention as Greek entrepreneurship was traditionally based on the light, labour- or resource-intensive production and the main bulk of the literature was not on that topic. Second, during the deep and protracted crisis that Greece has experienced, several production transformations have taken place that remain partly undiscovered. The present paper attempts to analyse the characteristics of large firms that drove their profitability and improved their resilience during the crucial time period 2011–16.

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Section: Literature Review 21 the Determinants Of Firm Profitabilitymentioning

confidence: 99%

Section: Literature Review 21 the Determinants Of Firm Profitabilitymentioning

confidence: 99%

Section: Econometric Analysismentioning

confidence: 99%

See 1 more Smart Citation

Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

Tsiapa

2021

EJMBE

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Determinants of IPO Activity: Does IPO Activity Fluctuate in Accordance with the Business Cycle? Evidence from European Firms

Costa

2016

SSRN Journal

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Determinants of Firm Growth: Empirical Evidence from Swiss Listed Companies

Cited by 2 publications

References 46 publications

Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

Determinants of IPO Activity: Does IPO Activity Fluctuate in Accordance with the Business Cycle? Evidence from European Firms

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