Volume 27, Issue 3 (IJIEPR 2016)                   IJIEPR 2016, 27(3): 209-217 | Back to browse issues page

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Abdollahi H, Ebrahimi S B, Farmani A. The inter-relationship between profitability and growth in the emerging Iranian market. IJIEPR 2016; 27 (3) :209-217
URL: http://ijiepr.iust.ac.ir/article-1-685-en.html
The inter-relationship between profitability and growth in the emerging Iranian market
Hooman Abdollahi1 , Seyed Babak Ebrahimi 2, Ali Farmani3
1- MSc Student, Department of Industrial Engineering, Karaj Branch, Islamic Azad University, Alborz, Iran
2- Assistant Professor, Department of Industrial Engineering, K. N. Toosi University of Technology, Tehran, Iran , b_ebrahimi@kntu.ac.ir
3- University of Science and Technology, Tehran, Iran
Abstract:   (6150 Views)

Presently, emerging economies are acquiring singular positions all over the world. The complexities of nowadays economy have caused international companies and investors to be of a tendency towards emerging markets for more profitability and growth. This study aims to find the relationships between firm's profitability and growth in Iranian manufacturing industry consisting of Tehran Stock Market listed manufacturing firms covering 2005-2014. In order to understand the direction of causality between firm growth and profitability, we use system-GMM (Generalized Method of Moments) to estimate growth and profit regressions. The results obtained indicate that there is positively bilateral relationship between profitability and growth in the case of Iranian manufacturing firms. Also, we find the positive impact of current profit (growth) on current growth (profit) is stronger than the impact of the prior year.  

Keywords: Finance, Economics, Firm growth and profitability, Panel data, System-GMM
Full-Text [PDF 298 kb]   (2628 Downloads)    
Type of Study: Research | Subject: Other Related Subject
Received: 2016/06/29 | Accepted: 2016/12/11 | Published: 2017/02/12
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