Research On Firm Size And Growth: Evidence Form Public Firms In Chinese Metal Industry

After30years of reform and opening-up, China’s economy sustainedrapid growth, both of the number and size of firms gained great increase,the situation of scale economic have been expanding to a certain extent.However, compared with developed countries, the size ofChina’s manufacturing firms, in particular the metal industry firms,is still smaller. This paper investigated the relationship between size andgrowth of Chinese metals industry firms, based on the data of44Chinesemetal industry public firms in the year of2000,2005,2010.This paper consists of six parts: Part I，introducing the purpose,innovations and disadvantages of this paper; Part II, reviewed bothdomestic and foreign literatures; Part III, introducing the theory whichwould be used to establish the basic assumptions and explain theempirical results; Part IV establish the basic hypothesis and regressionmodels; Part V, using regression model to analysis the relationshipbetween firm size and growth; Part VI, drawing conclusions andrecommendations and provide clues for future research.In this paper, we used regression analysis test the relationship betweengrowth and firm size which is decomposed to total assets, sales, and thenumber of employees, we also examined and compared the regressionresults in different years.The empirical research in this article come to the following two conclusions:(1) the size of public firms in China’s metals industry have asignificant negative impact to it’s growth;(2) growth is independent tothe proportion of fixed assets sales and net profit of margin sales,the proportion of highly qualified staff have a significant negativeimpact to firm growth.