Predictors of firm growth in India: An exploratory analysis using accounting information

Sibanjan Mishra and Soumya G. Deb

Cogent Economics & Finance, 2018, vol. 6, issue 1, 1553571

Abstract: This paper aims at identifying relevant financial factors which critically affects firm revenue growth. We specifically focus on the dynamic nature of such factors across up or down-market cycles and also for different scales and size of business. The study uses annual data of 17 accounting and financial variables for a sample of 1,450 Indian firms which exist continuously between 2003 and 2014 and generate a framework for identification of critical factors which affect firm revenue growth. We employ a variable reduction technique via principal component analysis (PCA), and then use the “principal factors” identified thereon, in a logistic regression approach to develop such a framework. The study finds efficiency in management of current assets and capital (both short- and long-term) to be the most critical factors, determining the firm revenue growth in Indian context. The relative importance of capital deployment efficiency is more for small firms than for large firms whereas asset management efficiency is the most critical factor in larger firms. Long-term solvency supersedes all other factors during market downturns. These findings may have important implications for firms and its stakeholders as a priori knowledge on the importance of critical factors regarding firm’s revenue growth could enable the mangers to support them in their decision-making process.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/23322039.2018.1553571 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oaefxx:v:6:y:2018:i:1:p:1553571

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/OAEF20

DOI: 10.1080/23322039.2018.1553571

Access Statistics for this article

Cogent Economics & Finance is currently edited by Steve Cook, Caroline Elliott, David McMillan, Duncan Watson and Xibin Zhang

More articles in Cogent Economics & Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().