Does Firm Age Affect Profitability? Evidence From Turkey
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Date
2016
Authors
Akben Selçuk, Elif
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Publisher
Int Inst Social & Economics Sciences-IISES
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Abstract
The objective of this study is to investigate the impact of firm age on the profitability of Turkish firms listed on Borsa Istanbul. Using a dataset covering the years between 2005 and 2014 and consisting of 302 non-financial firms per year on the average a fixed effects model with robust standard errors is estimated. Results reveal that there is a negative and convex relationship between firm age and profitability measured by return on assets return on equity or gross profit margin. This suggests that younger firms start to see a decline in their profitability from the beginning but they may become profitable again at an old age. Implications are provided.
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Keywords
Firm age, Firm Life Cycle, Financial Performance, Profitability, Fixed Effects Model, Emerging Markets, Turkey
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Citation
25
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Source
Volume
5
Issue
3
Start Page
1
End Page
9