Interrelationship Between Size, Growth and Profitability of Non Financial Firms in Nigeria

Abstract

This paper provides empirical evidence on the relationship between firm size, growth and the profitability of quoted non financial firms in Nigeria. Panel data framework was fitted to the secondary data obtained from one hundred and fifteen (115) companies that have ever been listed on the Nigerian Stock Exchange for the period 1998-2012. This study employs secondary data available in the annual reports of listed companies in Nigeria and the facts books published by the Nigeria Stock Exchange (NSE). The generalized method of moment results suggests that increase in profitability is the engine room of all encompassing growth. Transitively, profit has positive effect on growth while growth has positive effect on size.

Keywords: size, growth, profit, generalized method of moment