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FİRMA BÜYÜMESİ VE KARLILIK ARASINDAKI ETKİLEŞİM: (HALKA AÇIK) TÜRK İMALAT FİRMALARI ÜZERINE BİR UYGULAMA

Year 2014, Volume: 9 Issue: 2, 73 - 82, 01.12.2014

Abstract

There is still not a consensus on ‘which came first; the firm growth or the profitability’. According to some theoretical arguments, growth affects profitability and profitability supports growth. Because empirical evidence can not support the theoretical approaches considerably, this difference between the theoretical predictons and empirical evidences needs newly empirical evidence on Turkish manufacturing firms. Thus, this paper investigates interaction between firm growth and profitability using panel data on 137 Turkish listed manufacturing firms over the period 1997-2012. Using system-GMM (Blundell and Bond, 1998) growth and profit regressions are estimated. According to results there is a statistically significant positive relation between current profits and current growth. The impact of current profits on current growth is much stronger than the impact of current growth on current profits in the case of Turkish manufacturing firms. These results appear to contradict the theories in Industrial Organization which suggests a negative relationship. In addition, the results suggest that lagged profits affect current profits positively and lagged profitability is a significant determinant of current profits. Moreover, the link between current profits and lagged profits is much stronger than the link between current growth and current profits

References

  • Alchian, A. A., (1950), Uncertainty, evolution and economic theory, Journal of Political Economy, 58, 211–222.
  • Arellano, M., Bond, S., (1991), Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations, The Review of Economic Studies, 58, 77–297.
  • Asimakopoulos, I.; Samitas, A.; Papadogonas, T., (2009), Firm-specific and economy wide determinants of firm profitability: Greek evidence using panel data, Managerial Finance, 35(11), 930 – 939.
  • Baum, F.C., (2006), An Introduction to Modern Econometrics Using Stata. Stata Press, Texas.
  • Bhattacharjee, A., (2005), Models of Firm Dynamics and the Hazard Rate of Exits: Reconciling Theory and Evidence using Hazard Regression Models, Econometrics 0503021, EconWPA.
  • Blundell, R.; Bond, S., (1998), Initial conditions and moment restrictions in dynamic panel data models, Journal of Econometrics, 87, 115–143.
  • Bond, S., (2002), Dynamic panel models: a guide to micro data methods and practice, Institute for Fiscal Studies, Department of Economics, UCL, CEMMAP (Centre for Microdata Methods and Practice) Working Paper No. CWPO9/02.
  • Bottazzi, L., Da Rin, M. and Hellmann, T., (2008), Who are the Active Investors? Evidence from Venture Capital, Journal of Financial Economics, 89(3), 488-512.
  • Capon, N., Farley, J., Hoenig, S., (1990), Determinants of Financial Performance: A Meta-Analysis, Management Science, 36(10), 1143 – 1159.
  • Coad, A., (2007), Testing the principle of ‘growth of the fitter’: the relationship between profits and firm growth, Structural Change and Economic Dynamics, 18(3), 370–386.
  • Coad, A., (2010), Exploring the processes of firm growth: Evidence from a vector autoregression. Industrial and Corporate Change, 19(6), 1677-1703.
  • Cowling, M., (2004), The growth-profit nexus, Small Business Economics, 22(1), 1–9.
  • Cox, H.; Mowatt, S.; Prevezer, M., (2002), “The Firm in the Information Age: Organizational Responses to Technological Change in the Processed Foods Sector”, Industrial and Corporate Change, 11(1), 135-158.
  • Davidson, R.; MacKinnon, J.G., (2004), Econometric Theory and Methods, Oxford University Press.
  • Davidsson, P.; Steffens, P.; Fitzsimmons, J., (2009), Growing profitable or growing from profits: Putting the horse in front of the cart? Journal of Business Venturing, 24(4), 388-406.
  • Delmar, F., Davidsson, P., Gartner, W. (2003), Arriving at the high-growth firm, Journal of Business Venturing, 18, 189-216.
  • Geroski, P.; S. Machin; C. Walters, (1997), Corporate Growth and Profitability, Journal of Industrial Economics, 45(2), 171-189.
  • Gschwandtner, A., (2005), Profit persistence in the ‘very’ long run: evidence from survivors and exiters”, Applied Economics, 37(7), 793-806.
  • Guariglia, A., (2009), Internal Financial Constraints, External Financial Constraints, and Investment Choice: Evidence from a Panel of UK Firms, Journal of Banking and Finance, 32(9), 1795-1809.
  • Höbarth, L. L., (2006), Modeling the relationship between financial indicators and company performance-An empirical Study for us liste dcompanies, France: Dissertation Vienna University of Economics and Business Administration.
  • Ijiri, Y.; Simon, H. A., (1977), Skew Distributions and the Sizes of Business Firms, North Holland, Amsterdam.
  • Holland, Amsterdam.Jang, S.; Park, K., (2011), Inter-relationship between firm growth and profitability, International Journal of Hospitality Management, 30, 1027-1035.
  • Jovanovic, B., (1982), Selection and the evolution of industry, Econometrica, 50, 649–670.
  • Kiani K. M.; Chen E. H.; Madjd-Sadjadi Z., (2012), Financial factors and firm growth: Evidence from financial data on Taiwanese firms, Quantitative Finance, 12(8), 1299-1314.
  • Liu, W. C.; Hsu, C. M., (2006), Financial Structure, Corporate Finance and Growth of Taiwan's Manufacturing Firms, Review of Pacific Basin Financial Markets and Policies, 9(1), 67-95.
  • Markman, G.D.; Gartner, W.B., (2002), Is extraordinary growth profitable? A study of Inc. 500 High growth companies. Entrepreneurship Theory Pract, 27, 65–75.
  • Marris, R., (1963), The economic theory of managerial capitalism, London: Macmillan.
  • McDonald, J., (1999), The Determinants of Firm Profitability in Australian Manufacturing, The Economic Record, 75(229), 115-26.
  • Mueller, D. C., (1969), A theory of conglomerate mergers, Quarterly Journal of Economics, 83(4), 643–659.
  • Mueller, D. C., (1977), The persistence of profit above the norm, Economica, 44, 369-380.
  • Nakano, A.; Kim, D., (2011), Dynamics of Growth and Profitability: The Case of Japanese Manufacturing Firms, Global Economic Review: Perspectives on East Asian Economies and Industries, 40(1), 67-81.
  • Nelson, R.; Winter, S., (1982), An Evolutionary Theory of Economic Change, Cambridge, MA: Belknap.
  • Niskanen, M.; Niskanen, J., (2007), The Determinants of Firm Growth in Small and Micro Firms: Evidence on Relationship Lending Effects, European Financial Management Association 2007 Annual Conference, Vienna, Austria, 27-30 June 2007.
  • Penrose, E., (1959), The Theory of The Growth of the firm, New York: Wiley.
  • Robson, P. J. A.; Bennett, R. J., (2000), SME Growth: The Relationship with Business Advice and External Collaboration, Small Business Economics, 15(3), 193-208.
  • Roodman, D.M., (2009a), How to do xtabond2: an introduction to difference and system GMM in Stata, Stata Journal, 9(1), 86–136.
  • Roodman, D.M., (2009b), A note on the theme of too many instruments, Oxford Bulletin of Economics and Statistics, 71(1), 135-158.
  • Roper, S., (1999), Modelling Small Business Growth and Profitability, Small Business Economics, 13, 235-252.
  • Sarafidis, V., Yamagata, T., Robertson, D., (2009), A test of cross section dependence for a linear dynamic panel model with regressors, Journal of Econometrics, 148, 149–161.
  • Serrasqueiro, Z., (2009), Growth and profitability in Portuguese companies: A dynamic panel data approach. Economic Interferences, 9, 565-573.
  • Serrasqueiro, Z.; Nunes, P.M.; Sequeira, S. T .N., (2007), Firms’ growth opportunities and profitability: a nonlinear relationship, Applied Financial Economics Letters, 3(6), 373-379.
  • Sexton, D. L., Pricer, R.W.; Nenide, B., (2000), Measuring Performance in High Growth Firms, Paper presented at the Babson Entrepreneurship Research Conference, Wellesley, MA.
  • Windmeijer, F., (2005), A finite sample correction for the variance of linear efficient two-step GMM estimators, Journal of Econometrics, 126 (1), 25-51.

THE INTERACTION BETWEEN FIRM GROWTH AND PROFITABILITY: EVIDENCE FROM TURKISH (LISTED) MANUFACTURING FIRMS

Year 2014, Volume: 9 Issue: 2, 73 - 82, 01.12.2014

Abstract

Firma büyümesinin mi yoksa karlılığın mı önce geldiği konusunda hala ortak bir yargı bulunmamaktadır. Bazı teorik görüşlere göre, büyüme karlılığı etkilemekte ve karlılık da büyümeyi desteklemektedir. Ampirik bulguların teorik yaklaşımları dikkate değer şekilde destekleyememesi nedeniyle, teorik çıkarımlarla ampirik bulgular arasındaki oluşan bu farklılık Türk imalat firmaları için de yeni bir ampirik bulguyu gerektirmektedir. Söz konusu kapsamda, 1997-2012 dönemine için halka açık 137 Türk imalat firmasından oluşan bir panel veri seti kullanılarak bu çalışmada firma büyümesi ve karlılık arasındaki etkileşim araştırılmaktadır. Sistem-GMM (Blundell and Bond, 1998) kullanılarak büyüme ve kar regresyonları tahmin edilmektedir. Elde edilen sonuçlara göre, cari karlar ile cari büyüme arasında istatistiksel olarak anlamlı pozitif bir ilişki bulunmaktadır. Türk imalat firmaları için cari karların cari büyüme üzerindeki etkisi, cari büyümenin cari karlar üzerindeki etkisinden daha güçlü olduğu görülmektedir. Bu sonuçlar, büyüme ile karlılık arasında negatif ilişkiyi destekleyen Endüstriyel Organizasyon teorisine ters düşmektedir. Bunun yanısıra, gecikmeli karların cari karları pozitif etkilediği ve gecikmeli karların cari karların önemli bir belirleyicisi olduğu sonucuna da varılmaktadır. Üstelik cari karlar ile gecikmeli karlar arasındaki bağlantının cari büyüme ve cari karlar arasındaki bağlantıdan daha güçlü olduğu görülmektedir

References

  • Alchian, A. A., (1950), Uncertainty, evolution and economic theory, Journal of Political Economy, 58, 211–222.
  • Arellano, M., Bond, S., (1991), Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations, The Review of Economic Studies, 58, 77–297.
  • Asimakopoulos, I.; Samitas, A.; Papadogonas, T., (2009), Firm-specific and economy wide determinants of firm profitability: Greek evidence using panel data, Managerial Finance, 35(11), 930 – 939.
  • Baum, F.C., (2006), An Introduction to Modern Econometrics Using Stata. Stata Press, Texas.
  • Bhattacharjee, A., (2005), Models of Firm Dynamics and the Hazard Rate of Exits: Reconciling Theory and Evidence using Hazard Regression Models, Econometrics 0503021, EconWPA.
  • Blundell, R.; Bond, S., (1998), Initial conditions and moment restrictions in dynamic panel data models, Journal of Econometrics, 87, 115–143.
  • Bond, S., (2002), Dynamic panel models: a guide to micro data methods and practice, Institute for Fiscal Studies, Department of Economics, UCL, CEMMAP (Centre for Microdata Methods and Practice) Working Paper No. CWPO9/02.
  • Bottazzi, L., Da Rin, M. and Hellmann, T., (2008), Who are the Active Investors? Evidence from Venture Capital, Journal of Financial Economics, 89(3), 488-512.
  • Capon, N., Farley, J., Hoenig, S., (1990), Determinants of Financial Performance: A Meta-Analysis, Management Science, 36(10), 1143 – 1159.
  • Coad, A., (2007), Testing the principle of ‘growth of the fitter’: the relationship between profits and firm growth, Structural Change and Economic Dynamics, 18(3), 370–386.
  • Coad, A., (2010), Exploring the processes of firm growth: Evidence from a vector autoregression. Industrial and Corporate Change, 19(6), 1677-1703.
  • Cowling, M., (2004), The growth-profit nexus, Small Business Economics, 22(1), 1–9.
  • Cox, H.; Mowatt, S.; Prevezer, M., (2002), “The Firm in the Information Age: Organizational Responses to Technological Change in the Processed Foods Sector”, Industrial and Corporate Change, 11(1), 135-158.
  • Davidson, R.; MacKinnon, J.G., (2004), Econometric Theory and Methods, Oxford University Press.
  • Davidsson, P.; Steffens, P.; Fitzsimmons, J., (2009), Growing profitable or growing from profits: Putting the horse in front of the cart? Journal of Business Venturing, 24(4), 388-406.
  • Delmar, F., Davidsson, P., Gartner, W. (2003), Arriving at the high-growth firm, Journal of Business Venturing, 18, 189-216.
  • Geroski, P.; S. Machin; C. Walters, (1997), Corporate Growth and Profitability, Journal of Industrial Economics, 45(2), 171-189.
  • Gschwandtner, A., (2005), Profit persistence in the ‘very’ long run: evidence from survivors and exiters”, Applied Economics, 37(7), 793-806.
  • Guariglia, A., (2009), Internal Financial Constraints, External Financial Constraints, and Investment Choice: Evidence from a Panel of UK Firms, Journal of Banking and Finance, 32(9), 1795-1809.
  • Höbarth, L. L., (2006), Modeling the relationship between financial indicators and company performance-An empirical Study for us liste dcompanies, France: Dissertation Vienna University of Economics and Business Administration.
  • Ijiri, Y.; Simon, H. A., (1977), Skew Distributions and the Sizes of Business Firms, North Holland, Amsterdam.
  • Holland, Amsterdam.Jang, S.; Park, K., (2011), Inter-relationship between firm growth and profitability, International Journal of Hospitality Management, 30, 1027-1035.
  • Jovanovic, B., (1982), Selection and the evolution of industry, Econometrica, 50, 649–670.
  • Kiani K. M.; Chen E. H.; Madjd-Sadjadi Z., (2012), Financial factors and firm growth: Evidence from financial data on Taiwanese firms, Quantitative Finance, 12(8), 1299-1314.
  • Liu, W. C.; Hsu, C. M., (2006), Financial Structure, Corporate Finance and Growth of Taiwan's Manufacturing Firms, Review of Pacific Basin Financial Markets and Policies, 9(1), 67-95.
  • Markman, G.D.; Gartner, W.B., (2002), Is extraordinary growth profitable? A study of Inc. 500 High growth companies. Entrepreneurship Theory Pract, 27, 65–75.
  • Marris, R., (1963), The economic theory of managerial capitalism, London: Macmillan.
  • McDonald, J., (1999), The Determinants of Firm Profitability in Australian Manufacturing, The Economic Record, 75(229), 115-26.
  • Mueller, D. C., (1969), A theory of conglomerate mergers, Quarterly Journal of Economics, 83(4), 643–659.
  • Mueller, D. C., (1977), The persistence of profit above the norm, Economica, 44, 369-380.
  • Nakano, A.; Kim, D., (2011), Dynamics of Growth and Profitability: The Case of Japanese Manufacturing Firms, Global Economic Review: Perspectives on East Asian Economies and Industries, 40(1), 67-81.
  • Nelson, R.; Winter, S., (1982), An Evolutionary Theory of Economic Change, Cambridge, MA: Belknap.
  • Niskanen, M.; Niskanen, J., (2007), The Determinants of Firm Growth in Small and Micro Firms: Evidence on Relationship Lending Effects, European Financial Management Association 2007 Annual Conference, Vienna, Austria, 27-30 June 2007.
  • Penrose, E., (1959), The Theory of The Growth of the firm, New York: Wiley.
  • Robson, P. J. A.; Bennett, R. J., (2000), SME Growth: The Relationship with Business Advice and External Collaboration, Small Business Economics, 15(3), 193-208.
  • Roodman, D.M., (2009a), How to do xtabond2: an introduction to difference and system GMM in Stata, Stata Journal, 9(1), 86–136.
  • Roodman, D.M., (2009b), A note on the theme of too many instruments, Oxford Bulletin of Economics and Statistics, 71(1), 135-158.
  • Roper, S., (1999), Modelling Small Business Growth and Profitability, Small Business Economics, 13, 235-252.
  • Sarafidis, V., Yamagata, T., Robertson, D., (2009), A test of cross section dependence for a linear dynamic panel model with regressors, Journal of Econometrics, 148, 149–161.
  • Serrasqueiro, Z., (2009), Growth and profitability in Portuguese companies: A dynamic panel data approach. Economic Interferences, 9, 565-573.
  • Serrasqueiro, Z.; Nunes, P.M.; Sequeira, S. T .N., (2007), Firms’ growth opportunities and profitability: a nonlinear relationship, Applied Financial Economics Letters, 3(6), 373-379.
  • Sexton, D. L., Pricer, R.W.; Nenide, B., (2000), Measuring Performance in High Growth Firms, Paper presented at the Babson Entrepreneurship Research Conference, Wellesley, MA.
  • Windmeijer, F., (2005), A finite sample correction for the variance of linear efficient two-step GMM estimators, Journal of Econometrics, 126 (1), 25-51.
There are 43 citations in total.

Details

Primary Language Turkish
Journal Section Articles
Authors

Serap Çoban This is me

Publication Date December 1, 2014
Published in Issue Year 2014 Volume: 9 Issue: 2

Cite

APA Çoban, S. (2014). THE INTERACTION BETWEEN FIRM GROWTH AND PROFITABILITY: EVIDENCE FROM TURKISH (LISTED) MANUFACTURING FIRMS. Bilgi Ekonomisi Ve Yönetimi Dergisi, 9(2), 73-82.