The effect of firm size on profitability: evidence from food and beverages in Malaysia / Nurul Shafika Mohd Robani

The size of a firm plays an important role in determining the kind of relationship the firm enjoys within and outside its operating environment. The larger a firm is, the greater the influence it has on its stakeholders. Firm size has been considered as an important determinant of firm profitability (Student, 2013). In determining the business success of a firm, profitability performs a dynamic role. Profitability is the amount of money a firm can engender with whatever resources the firm has. The eventual goal for any organization is maximizing its profitability (Niresh & Velnampy, 2014). Size has been recognized in the literature as a fundamental variable in explaining organizational profitability and a number of studies have tried to explore the effect of firm size on profitability. However, the results of these prior studies have been inconsistent and controversial; while some scholars reported positive relationship, others reported negative relationship, thus calling for further investigation (John & Adebayo, 2013).
Data collection is using the secondary data which is from Thomson Reuters Database. The data collected from the period of 12 years from year 2006 to 2017. This research uses the method of regression analysis, descriptive analysis and correlation analysis of panel data.