The Impact of Leverage on Firm Growth. Empirical Evidence from Romanian Listed Firms
2016 ◽
Vol 9
(2)
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pp. 147-158
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Keyword(s):
AbstractThe aim of the paper is to assess the impact of leverage on firm growth in periods of economic growth and economic uncertainty. We employ a sample of Romanian listed firms over the period 2001-2011 and several alternative measures for firm growth (i.e. sales growth, assets growth, and employment growth). The results of fixed effects regression model show that the leverage has a positive effect on firm growth. Furthermore, profitability was found to positively influence the firm growth, while older firms saw a faster increase in assets and sales. Within this particular sample, firm size appears to constrain growth.