Firm Size, Firm Age, and Firm Profitability: Evidence from China

Rahman, Jahidur Md; Yilun, Liu

doi:10.31966/jabminternational.v28i1.829

Cited by 14 publications

(15 citation statements)

References 14 publications

(33 reference statements)

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“…A Hausman test is used to determine whether a fixed effects model or a random effects model must be used to test the hypotheses in this study (Rahman and Yilun, 2021). Table 4 presents the results of the Hausman test.…”

Section: Hausman Testmentioning

confidence: 99%

CEO characteristics and firm performance: evidence from private listed firms in China

Rahman

Chen²

2022

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Purpose This study aims to examine the effect of the chief executive officer (CEO) characteristics on corporate performance in private listed firms in China. Design/methodology/approach Fixed effects regressions are used to explore the connection of CEO age, tenure, political connection, duality and gender with firm performance. The final panel data sample consists of 16,010 firm-year observations from 2010 to 2020, including A-share private firms listed in the Shenzhen and Shanghai Stock Exchanges. Findings Five hypotheses are proposed, and results show that certain CEO characteristics, such as age, tenure and political connection, are positively related to corporate performance. Contrary to expectations, CEO duality and gender do not affect firm performance. Originality/value Findings present implications for future research on corporate governance and political connections of private listed firms.

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Section: Hausman Testmentioning

confidence: 99%

CEO characteristics and firm performance: evidence from private listed firms in China

Rahman

Chen²

2022

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“…Also, changes in the markets around the world validate the need to reexamine the determinants of profitability. Previous studies examining different factors that impact profitability, with inconsistent results, including but not limited to WC management (Alvarez et al , 2021); firm age and firm size (Rahman and Yilun, 2021); liquidity and financial leverage (Zaitoun and Alqudah, 2020). To illustrate results inconsistency, according to Azhar and Ahmed (2019), firm size has negative effect on company’s profitability, whereby a positive effect was reported by Alarussi and Alhaderi (2018).…”

Section: Discussionmentioning

confidence: 99%

The determinants of profitability in non-financial UK SMEs

Youssef¹,

Salloum²,

Sayah³

2022

EBR

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Purpose The purpose of this study is to examine determinants of profitability of non-financial firms listed small- and medium-sized enterprises (SMEs) in the UK from 2012 till 2020. It has been argued that profitability plays a key role in economic development and growth. Despite the important role that SMEs play in developed economies like UK, academic research into SMEs profitability determinants in developed countries is not extensive. Design/methodology/approach The methodologies used include dynamic panel data estimation techniques. Relationship of nine independent variables with profitability was examined. Two models are created using return on assets (ROA) and return on equity (ROE) as dependent variables. Size, age, efficiency, working capital, liquidity, leverage and volatility of the firm represent firm-specific independent variables. Two macroeconomic variables, namely, gross domestic product and inflation are also used as independent variables. Data obtained from Thomson Reuters Data Stream for 93 listed SMEs companies in the UK from 2012 to 2020. Fixed effects, random effects and generalized method of moments were used in data analysis. Findings All variables showed significant influence on profitability, except liquidity reflecting insignificant impact on profitability in two regression models conducted for 93 firms under study. Efficiency, liquidity and leverage are the only three independent variables with similar impact on both ROA and ROE. Practical implications Identifying determinants of profitability will help stakeholders and corporate executive make sound decisions to ensure sustainability and stability at the firm level. This is particularly important given the key role played by SMEs in economic development and growth. The findings of this study would help direct financial management practices to ensure a favorable sustainable organizational performance. Originality/value This study differs from previous studies that focused mainly on developing countries; with limited research conducted on profitability of SMEs in developed economies. To the best of the author’s knowledge, this is the first study to examine factors influencing profitability of SMEs in UK. Previous studies concentrated on service sector like insurance and hotel firms.

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“…Besides that, Cyril and Singla (2021) maintain that firms that are older are more profitable. On the contrary, Rahman & Yilun (2021) found that older firms are less profitable than younger firms. Empirical studies found mixed result effect of growth to profitability.…”

Section: Leverage and Profitabilitymentioning

confidence: 92%

“…Third, aging can harm a company's financial performance because the "inertial effect" causes companies to become inflexible and have difficulty adjusting to the rapidly changing business environment in which they operate (Akben-Selcuk, 2016). Moreover, Rahman and Yilun (2021) argues that as firms grow old, they become more rigid with rules and regulations thus causing longer process of decision making; this inefficiency will severely impact firm profitability.…”

Section: Working Capital Management 59mentioning

confidence: 99%

Working Capital Management and Leverage to Profitability: Case of Manufacturing Firms in Indonesia

Sany

Winata²,

Yasin³

2023

IJOBP

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This study aims to investigate whether Working Capital Management (WCM) and leverage affect firm profitability. Data concern was gathered from Bloomberg database terminal. Sample is manufacturing companies listed in Indonesian Stock Exchange (IDX) over the period of 2014 – 2020, which already established for some time. WCM is measured by using Cash Conversion Cycle (CCC), profitability is proxied with ROA while leverage is proxied by Debt-to-Equity. We find that the length of CCC days does not affect profitability, while the higher proportion of debt to equity will reduce profitability, on the other hand, the higher sales growth will enhance better firms’ profitability performance. Our findings contribute to understanding of the relationship of CCC and leverage on profitability in emerging markets.

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Firm Size, Firm Age, and Firm Profitability: Evidence from China

Cited by 14 publications

References 14 publications

CEO characteristics and firm performance: evidence from private listed firms in China

CEO characteristics and firm performance: evidence from private listed firms in China

The determinants of profitability in non-financial UK SMEs

Working Capital Management and Leverage to Profitability: Case of Manufacturing Firms in Indonesia

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