The Association between Finance Policy, Business Risk and Firm Growth Affect in Taiwan

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Title:	The Association between Finance Policy, Business Risk and Firm Growth Affect in Taiwan
Authors:	Lee, Joe-Ming;Lee, Wo-Chiang
Contributors:	淡江大學財務金融學系
Keywords:	PSTR model;business risk;firm size;firm growth;free cash flow
Date:	2015-05
Issue Date:	2015-05-18 21:28:56 (UTC+8)
Publisher:	淡江大學財務金融學系
Abstract:	This study applies the panel smooth transition regression (PSTR) model to investigate the non-linear dynamic relationship between firm growth and firm size in the Taiwan electronic information industry. Our empirical results reveal that firm growth and firm size present a non-linear relationship. Firm growth is different under the size threshold value and the control variables of firm age, business risk, debt, R&D, and free cash flow (FCF). The different firm size attributes of firm growth produce completely different business risks. We recommend that firms should measure business risk and firm growth. High leverage risk does not necessarily mean one will get a higher firm growth. In sum, the business risk is an important index when looking at firm growth.
Relation:	2015第十二屆兩岸金融市場發展研討會論文集
Appears in Collections:	[Graduate Institute & Department of Banking and Finance] Proceeding

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