Title: What drives firm growth? Evidence from the Greek industry

Authors: Ilias A. Makris

Addresses: Department of Finance and Auditing, School of Management and Economics, Technological Education Institute of Kalamata, Antikalamos 241 00, Kalamata, Greece

Abstract: This work deals with the strongly debated issue of firm growth. A large dataset of Greek firms from various sectors is used, including economic and non-economic indices, to examine the role of several indicators and firm characteristics in economic performance. The period between 2002 and 2009 is covered, including both, years of economic boost (Olympic Games of 2004) and of severe decrease (current economic crisis), to highlight possible differentiations in firms' growth rates. Drawing on literature, a growth model relying on sales volume is developed, and statistically tested for its ability to interpret firm performance. Findings indicate financial 'health' (leverage and liquidity) as a critical interpreter of sales' growth. Apart from financial indicators, non-economic data such as firm size also seem to be a significant determinant of firm dynamics. Finally, by examining firm's orientation, we find that clearly export-oriented firms appear higher rates of growth.

Keywords: firm growth; growth indicators; regression analysis; leverage; investment; exporting activity; business research; exports; Greece; economic performance; growth model; modelling; sales volume; firm performance; liquidity; firm size.

DOI: 10.1504/IJEBR.2014.057953

International Journal of Economics and Business Research, 2014 Vol.7 No.1, pp.17 - 27

Published online: 07 Jun 2014 *

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