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Profitability in Swedish Micro-Firms: a quantile regression approach
Mid Sweden University, Faculty of Human Sciences, Department of Social Sciences.
Mid Sweden University, Faculty of Human Sciences, Department of Social Sciences.
2012 (English)In: International Business Research, ISSN 1913-9004, E-ISSN 1913-9012, Vol. 5, no 8Article in journal (Refereed) Published
Abstract [en]

The purpose of this study is to identify a function for the profitability of Swedish micro firms in the sectors of health, transport, trade and metal. In order to understand how micro firms relate to key variables, such as firm size, growth of sales, productivities, lagged profits, asset turnover and firm’s age, OLS (Ordinary Least Squares), and the more robust quantile regression techniques, are used to estimate micro-firm profitability. Data from 2007 is used for this purpose. The results show that growth (competitive condition) and total factor productivity (comparative advantage) have a significant positive effect on micro-firm profitability, and that size (diminishing returns states) is found to have a rather significant negative effect on micro-firm profitability. The results also indicate a strong relationship between microeconomic theory suggestions and micro-firm profitability for the all micro firms except those in the metal sector. Moreover, the quantile regression approach provided a better understanding, regarding the dynamics of the factors that affect profitability, and provided more interesting results than OLS normally do.

Place, publisher, year, edition, pages
Canada, 2012. Vol. 5, no 8
National Category
Social Sciences
URN: urn:nbn:se:miun:diva-17493DOI: 10.5539/ibr.v5n8p94OAI: diva2:573086
Available from: 2012-11-29 Created: 2012-11-29 Last updated: 2013-11-11Bibliographically approved

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Salman, A. KhalikYazdanfar, Darush
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