A1 Journal article (refereed)
Firm growth and profitability : The role of age and size in shifts between growth–profitability configurations (2023)

Mansikkamäki, S. (2023). Firm growth and profitability : The role of age and size in shifts between growth–profitability configurations. Journal of Business Venturing Insights, 19, Article e00372. https://doi.org/10.1016/j.jbvi.2023.e00372

JYU authors or editors

Publication details

All authors or editors: Mansikkamäki, Susanna

Journal or series: Journal of Business Venturing Insights

ISSN: 2352-6734

eISSN: 2352-6734

Publication year: 2023

Volume: 19

Article number: e00372

Publisher: Elsevier

Publication country: United States

Publication language: English

DOI: https://doi.org/10.1016/j.jbvi.2023.e00372

Publication open access: Openly available

Publication channel open access: Partially open access channel

Publication is parallel published (JYX): https://jyx.jyu.fi/handle/123456789/84994

Abstract

To investigate the routes toward profitable growth, this study partially replicates and extends the work of Davidsson et al. (2009) on firm growth–profitability dynamics with multi-industry data on over 66,000 Finnish firms. The results support prior findings on initial profitability being more important than initial growth for achieving high performance in both performance dimensions. Additional investigations on the role of firm age and size reveal further interesting dynamics: Very small young firms face fewer risks from growing at a low profitability level than other firms, and the benefits of firm size for future performance depend on the firm's current profitability. The results advance the understanding of the reasons and consequences of the different modes (i.e., profitable vs. non-profitable) of firm growth.

Keywords: growth; profitability; productivity

Free keywords: firm performance; growth; profitability; firm age; firm size; replication

Contributing organizations

Ministry reporting: Yes

VIRTA submission year: 2023

JUFO rating: 1