A Nonlinear Relationship Between Corporate Size and Profitability

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Muhasebe ve Vergi Uygulamaları Dergisi
Cilt: 18 Sayı: 1
A Nonlinear Relationship Between Corporate Size and Profitability

A Nonlinear Relationship Between Corporate Size and Profitability

Pages : 151-170

View : 37 | Download : 32

Publication Date : 2025-02-28

Article Type : Research Paper

Abstract :Corporate growth is a natural consequence of management\\\'s wealth maximization efforts. However, its effects on profitability are not fully understood. This study examines the size-profitability relationship using quarterly data from publicly listed Turkish firms. The findings indicate that size is positively correlated with profitability. However, this relationship is not linear. After reaching a certain point in size, the marginal return becomes negative, raising questions about growth-related decisions. The findings are robust to alternative econometric methods (GMM and FE-OLS), alternative measures of size, and alternative specifications of nonlinearity.
Keywords : Firma Büyüklüğü, Karlılık, Doğrusal Olmayan İlişki, ROA, Halka Açık Firmalar

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