Does Firm Size Affect The Firm Profitability? Evidence from Turkey

Abstract

The aim of this study is to investigate the affect of firm size on profitability. In this study, data of 200 companies which were active in Istanbul Stock Exchange (ISE) between the years 2008-2011 has been used.  “Return on Assets” (ROA) has been used as indicators of firm profitability and total assets, total sales and number of employees have been used as indicators of size. Multiple regression and correlation methods have been used in empirical analyses.  The result of analysis indicates a positive relation between size indicators and profitability of firms. Control variables as the age of the firms and leverage rate have been found in a negative relation with ROA, but liquidity rate and ROA have been determined to have a positive relation.

Keywords: Firm size, Profitability, Firm Performance, Turkey