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Largest Firms (largest + firm)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

Scale and the Scale Effect in Market-based Accounting Research

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2003
Peter D. Easton
The nature of the data we usually encounter in market-based accounting research is such that the results of the regressions of market capitalization on financial statement variables (referred to ,price-levels' regressions) are driven by a relatively small subset of the very largest firms in the sample. We refer to this overwhelming influence of the largest firms as the ,scale effect'. This effect is more than heteroscedasticity. It arises due to the non-linearity in the relation between market capitalization and the financial statement variables. We present the case that scale is market capitalization rather than a correlated omitted variable. Since scale is market capitalization, we advocate its use as a deflator in a regression estimated using weighted least squares. This regression overcomes the scale effect and the resultant regression residuals are more economically meaningful. Christie's (1987) depiction of scale is the same as ours but he advocates the use of the returns regression specification in order to avoid scale effects. We agree that returns regressions should be used unless the research question calls for a price-levels regression. [source]

FIRM SIZE AND EFFICIENCY IN THE SOUTH AFRICAN MOTOR VEHICLE INDUSTRY,

AUSTRALIAN ECONOMIC PAPERS, Issue 4 2009
LILA J. TRUETT
The South African motor vehicle industry has historically been considered a critical industry in the South African economy and the target of numerous government policies designed to protect it and/or increase its international competitiveness. This study examines the cost performance of firms in this industry according to their size, using data categorised by output level. The results are consistent with statistically significant economies of scale at the lowest output levels and a cost inefficiency averaging from about seven to nine per cent for all firms. The findings also suggest that all else equal, the smallest firms and the largest firms have lower unit costs than mid-sized firms. While this work suggests that policies that would give incentives for the smallest firms to increase their scale of operations might help to reduce their unit costs, further investigation needs to be done with respect to why firms in the mid-level size categories appear to be less efficient. [source]

A Study of Industry Evolution in the Face of Major Environmental Disturbances: Group and Firm Strategic Behaviour of Spanish Banks, 1983,1997,

BRITISH JOURNAL OF MANAGEMENT, Issue 3 2004
JoséÁngel Zúñiga-Vicente
This paper examines the story of the evolution of a specific industry through the application of dynamic strategic group analysis. In particular, we analyse the relationship between major environmental disturbances and changes that have occurred over time in the competitive structure of the industry regarding two closely related central questions. First, the way in which these environmental transformations have influenced group patterns and stability, and second, the way in which such environmental disturbances has affected the strategic positioning of individual firms. We resort to alternative theoretical perspectives in an attempt to answer both questions. The empirical setting is the population of Spanish banks over the period 1983,1997. We make use of a new grouping algorithm , the Model-based Clustering or MCLUST , which may be enormously fruitful in future empirical works on strategic groups. This method allows researchers to obtain the optimal number of groupings over time in a much more objective way than the cluster techniques used until now. Compared to previous dynamic studies that only consider the largest firms, our research illustrates how a richer analysis of an industry dynamics can be obtained by using a dynamic analysis of strategic groups. Our results show that while there have been no industry-wide identical groupings year to year, there is an important strategic stability at group and firm-level punctuated by a high degree of strategic instability at times of major environmental disturbances. [source]