The determinants of firm growth – Evidence from listed firms in Taiwan

• Main Authors: Mei-Hsiu Chiu, 邱美琇
• Other Authors: Wen-Cheng Lu
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/92046299324685469533

碩士 === 真理大學 === 財經研究所 === 96 === Economists pay attention to the determinant factor of firm growth all the time. By observing the specific firm growth behavior, we can find the development of whole industry and then grasp the pulsation of overall economy. This assay will use the sample of 623 listed companies in Taiwan from the year 2001 to 2006. Because the sample data combines time and cross section data, we adopt Panel Data to obtain more sample information. Conclusions have the following several points: (1)Firm's scale exerts a negative effect on growth. (2)Firm age displays a positive effect on growth. (3)Cash flow shows a positive effect on growth. (4)R&D exhibits a negative effect on growth, but not obvious. (5)The rate of financial leverage demonstrates a positive effect on growth. (6)The rate of foreign capitals hold share indicates a positive effect on growth. (7)Profit has a positive effect on growth. We also use ordinary least square estimate (OLS) and quantile regression (QR) to investigate the impact between firm's growth rate and firm's characteristic parameters. The result demonstrates the difference between OLS and QR and shows the QR practicability .Thus we use QR to catch at overall picture of the different quantile for influencing the firms to grow up. Appropriate financial leverage will bring growing up to the firm. On the contrary, the excessive financial leverage is used will bring negative growth to the firm. We use Hansen (1999) developed method on panel threshold model that allows us to examine threshold effects that leverage threshold divides the relationship of growth and leverage into two or more than two asymmetric regimes .Our empirical results show that threshold leverage value is 0.830, which separate the sample into two different regimes. When the rate of the financial leverage is lower than 0.830, financial leverage exerts a positive effect on growth, but not obvious. When the rate of the financial leverage is higher than 0.830, financial leverage exerts a negative effect on growth .It means that there is the rate of the fittest financial leverage.