Does Size Matter in Firm Performance? Evidence from US Public Firms

Jim Lee

International Journal of the Economics of Business, 2009, vol. 16, issue 2, 189-203

Abstract: This paper reexamines the determinants of firm performance and, in particular, the role that firm size plays in profitability. A fixed-effects dynamic panel data model for over 7,000 US publicly-held firms during the period 1987-2006 provides evidence that profit rates are positively correlated with firm size in a non-linear manner, holding an array of firm- and industry-specific characteristics constant. In addition, industry-specific fixed effects play a negligible role in the presence of firm-specific fixed effects.

Keywords: Profit Rates; Panel Data; Firm Size; Industry Effects; Firm Effects (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (64)

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DOI: 10.1080/13571510902917400

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