Growth and profitability on the emergent brazilian market

Management Letters/Cuadernos de Gestión

Julio Daza Izquierdo¹ 

[1] Departamento de Economía Financiera y Contabilidad, Facultad de Ciencias Económicas y Empresariales, Av. Elvas s/n, 06071Badajoz (España). [e-mail];

关键词: Firm growth and profitability;    emerging markets;    panel data;    GMM;   

DOI  :  10.5295/cdg.130444jd

来源: DOAJ

【 摘 要 】

Currently, the emerging economies are taking the top positions globally. The consequences of the financial crisis have caused investors and companies manage their capital and effort to emerging markets for growth and corporate profitability that developed countries do not offer. In this context, the aim of this paper is to analyze firm growth in Brazil over the 1995-2011 period and, more precisely, its explanatory variables and its interrelationship with firm profitability. To that end, we firstly estimate a dynamic panel data regression model employing the Generalized Method of Moments (GMM). Secondly, we employ a Vector Autoregressive (VAR) system to analyze the relationship between growth and profitability. Our main results indicate that to obtain higher rates of return provide increased business growth, but not vice versa. Also worth noting that business growth behavior is different depending on the ownership and control of companies. The findings provide a better understanding of the behavior of firm growth in Brazil being useful for making decision of entrepreneurs and investors, and can be used in the field of regional and social policy.

【 授权许可】

Unknown