Research On Determinants Of Growth Of Corporations

Growth indicates corporations' future value which is of great importance to managers and investors. Therefore, it is necessary to study the determinants of growth.However, former studies on the determinants of growth adopted correlation analysis or regression analysis, which failed in two aspects: first, ignoring the error came from measurement of attributes which may influence the growth; second, being unable to describe and verify the complicated structure of attributes.In order to analyze the influence of various attributes on the growth of corporations more precisely, this paper conducts an empirical analysis adopting the approach of "Structural Equation Model" in two ways. First, it selects proper measures of attributes by employing "Confirmatory Factor Analysis"; second, it reveals the mechanism that various attributes influence the growth by employing "Path Analysis". The most significant accomplishment is that the study identifies the direct and indirect effects of attributes to the growth by bringing in an agency variable "capital structure", and thus exposit some new conclusion different from former studies..