AN EXPLORATORY FACTOR ANALYSIS OF FIRMS ENDOGENOUS GROWTH MEASURES

Main Article Content

Leonard Tchuta
Fuji Xie

Keywords

Firm growth measures, endogenous growth factors, financials, operations, capabilities

Abstract

Purpose: This study attempts to standardize firm endogenous growth measures by performing exploratory factor analysis on nine firm endogenous growth measures (equity book value, equity market value, working capital, stock R&D investments, stock advertisement investment, stock capital asset investment, operating expenses, sales revenue, and the number of employees).


Methodology: Data was generated by pooling a panel dataset of 116 firms and13 years timespan data.


Main Findings: The result of the analysis reveals three underlying firm growth factors (namely firm financials, operations, and capabilities) representing the initial nine growth measures.


Implications/Applications: The results of this research can be used as the bases for further research in firm endogenous growth model analysis.

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...
Abstract 90 | PDF Downloads 77 XML Downloads 1 ePUB Downloads 7

References

1. Arrow, K. J. (1962). The economic implications of learning by doing. The Review of Economic Studies, 29(3), 155-173. https://doi.org/10.2307/2295952
2. Barreto, I. (2010). Dynamic capabilities: A review of past research and an agenda for the future. Journal of Management, 36(1), 256-280. https://doi.org/10.1177/0149206309350776
3. Blundell, R., Griffith, R., & Van Reenen, J. (1999). Market share, market value and innovation in a panel of British manufacturing firms. The Review of Economic Studies, 66(3), 529-554. https://doi.org/10.1111/1467-937X.00097
4. Boonvut, S. (2017). The Quality Financial Statements of Small and Medium Enterprises Business (SME's) in View of the Tax Auditor. International Journal of Business and Economic Affairs, 2(6), 335-340. https://doi.org/10.24088/IJBEA-2017-26002
5. Cebeci, I. (2016). Istanbul's position as a financial centre: An empirical analysis. International Journal of Business and Economic Affairs, 1(1), 1-5. https://doi.org/10.24088/IJBEA-2016-11001
6. Chauvin, K. W., & Hirschey, M. (1993). Advertising, R&D expenditures and the market value of the firm. Financial management, 128-140. https://doi.org/10.2307/3665583
7. Coad, A., & Rao, R. (2010). Firm growth and R&D expenditure. Economics of Innovation and New Technology, 19(2), 127-145. https://doi.org/10.1080/10438590802472531
8. Del Monte, A., & Papagni, E. (2003). R&D and the growth of firms: Empirical analysis of a panel of Italian firms. Research Policy, 32(6), 1003-1014. https://doi.org/10.1016/S0048-7333(02)00107-5
9. Eveleens, C. (2010). Innovation management; a literature review of innovation process models and their implications. Science, 800: 900.
10. Geroski, P., & Machin, S. (1992). Do Innovating Firms Outperform Non‐Innovators? Business Strategy Review, 3(2), 79-90. https://doi.org/10.1111/j.1467-8616.1992.tb00030.x
11. Hall, B. H. (2007). Measuring the returns to R&D: The depreciation problem. National Bureau of Economic Research. https://doi.org/10.3386/w13473
12. Hall, B. H., & Mairesse, J. (1995). Exploring the relationship between R&D and productivity in French manufacturing firms. Journal of Econometrics, 65(1), 263-293. https://doi.org/10.1016/0304-4076(94)01604-X
13. HBR. (2011). HBR's 10 Must Reads on Strategy (Including Featured Article" What Is Strategy?" by Michael E. Porter). New York, NY: Harvard Business Press.
14. Joliffe, I., & Morgan, B. (1992). Principal component analysis and exploratory factor analysis. Statistical Methods in Medical Research, 1(1), 69-95. https://doi.org/10.1177/096228029200100105
15. Juan V. Garcia-Manjon, M. E. R.-M., & Romero-Merino, M. E. (2011). Research, development, and firm growth. Empirical evidence from European Top R&D spending firms. Research Policy, 41(6), 1084-1092. https://doi.org/10.1016/j.respol.2012.03.017
16. LOPES, A., Kissimoto, K. O., Salerno, M. S., Laurindo, F. J., & Carvalho, M. C. (2012). Innovation management: a literature review about the evolution and the different innovation models. Paper presented at the International Conference on Industrial Engineering and Operations Management.
17. Madani, S. (2017). Economic evaluation of investment for oceanographic research by using cost benefit analysis (A case study of Iranian National Institute for Oceanography). International Journal of Business and Economic Affairs, 2(2), 85-90. https://doi.org/10.24088/IJBEA-2017-22001
18. McKelvie, A., & Wiklund, J. (2010). Advancing firm growth research: A focus on growth mode instead of growth rate. Entrepreneurship Theory and Practice, 34(2), 261-288. https://doi.org/10.1111/j.1540-6520.2010.00375.x
19. Niesing, C. M., Merwe, S. W. D., & Potgieter, D. M. (2016). The impact of income-generating projects on stimulating the development of entrepreneurial activities in communities: The holding hands case. International Journal of Business and Economic Affairs, 1(1), 36-46. https://doi.org/10.24088/IJBEA-2016-11006
20. Nonaka, I., & Toyama, R. (2003). The knowledge-creating theory revisited: knowledge creation as a synthesizing process. Knowledge Management Research & Practice, 1(1), 2-10. https://doi.org/10.1057/palgrave.kmrp.8500001
21. Shepherd, D., & Wiklund, J. (2009). Are we comparing apples with apples or apples with oranges? Appropriateness of knowledge accumulation across growth studies. Entrepreneurship theory and practice, 33(1), 105-123. https://doi.org/10.1111/j.1540-6520.2008.00282.x
22. Shin, S. J., & Seo, W. (2017). Identifying new technology areas based on firm’s internal capabilities. Journal of Administrative and Business Studies, 3(3), 114-121. https://doi.org/10.20474/jabs-3.3.1
23. Sundar, C. S., & Al Harthi, F. N. S. (2015). Impact of capital structure on firm's profitability with reference to companies listed on MSM (Muscat Securities Market). International Journal of Business and Administrative Studies, 1(1), 23- 28. https://doi.org/10.20469/ijbas.10004
24. Teece, D. J. (2009). Dynamic capabilities and strategic management: organizing for innovation and growth. Oxford University Press, USA.