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 a...
Highlights
The crucial importance of firm growth in corporate finance has been studied widely in finance literature
(4) capital deployment efficiency (CADEFF) seems to be the most critical factor with an odds ratio equal to 4.150 which implies that for one-unit increment in this particular factor raises the odds of increase in sales by more than 300%. (5) in the pecking order of criticality is current asset efficiency (CAEFF) standing at an odds ratio of 2.549 which implies than an increment in one unit of this factor raises the odds of increase in sales by more than 150%. (6) Combining observations (3) and (5) above leads to an interesting conclusion
Discussion of results Overall, our results reveal, that factors related to CADEFF, CAEFF, SIZE, LTSOL and asset management efficiency (AMEFF) are positively affecting sales growth in decreasing order of importance
Summary
The crucial importance of firm growth in corporate finance has been studied widely in finance literature. That firms experiencing continuous growth have more likelihood of survival, contributes to creation of jobs and increase economic activity (Audretsch & Lehmann, 2005; Batjargal et al, 2013; Coad, Segarra, & Teruel, 2016; Thornhill & Gellatly, 2005). There are studies which reflect that at times, highly innovative firms may record low growth and vice versa. This may suggest that growth and survival cannot be studied in isolation (Mason & Brown, 2014; Nightingale & Coad, 2014). From the neoclassical to modern researchers, each school of thought have defined firm growth with different propositions the universal way is: a firm has to start, grow with various challenges, mature and decline. Despite the contradictions among different schools, the consensus among all is firm growth is beneficial for all the stakeholders like employees, managers, shareholders, creditors and even regulators and policy makers (Coad et al, 2016, Thornhill & Gellatly, 2005, Whetten, 1987)
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