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

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  • Jim Lee

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.

Suggested Citation

  • Jim Lee, 2009. "Does Size Matter in Firm Performance? Evidence from US Public Firms," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 16(2), pages 189-203.
  • Handle: RePEc:taf:ijecbs:v:16:y:2009:i:2:p:189-203
    DOI: 10.1080/13571510902917400
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    References listed on IDEAS

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    1. Annette Brown & J. David Brown, 1998. "Does Market Structure Matter?: New Evidence From Russia," William Davidson Institute Working Papers Series 159, William Davidson Institute at the University of Michigan.
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