Firm Performance and Size in Liberalized Era: The Indian Case

Abstract

The nexus between firm's characteristics and their financial performance has always been a major issue of discussion. Recent empirical research includes performing macro-level analysis on Indian companies relation between their measurable firm characteristics and their financial performance in post-liberalization era. But more sector specific research is needed to firmly establish these relationships. The current study focuses on two sectors, one high performing and another low performing, and conducts sector specific empirical analysis to determine the firm characteristics and performance nexus in varying financial, socio-economic conditions. We found that firm size was the most important factor influencing its financial performance.

Keywords: Financial Performance, Firm Characteristics, Size, India, Liberalization, Transportation Equipment, Textile

JEL Classification: L10, N25, D21, L62, L67