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An Analysis of the Growth and Profitability of the World's Largest Firms 1972 to 1977

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  • Peter J. Buckley
  • John H. Dunning
  • Robert D. Fearce

Abstract

The paper analyses the growth and profitability of the world's largest firms by reference to their size, degree of multinationality, main industry of operation, nationality of ownership and research intensity. The influence of size of firm on growth is stable but weak, its influence on profitability is negligible. Industry of operation has generally strongly influenced growth but the effect on profitability is not consistent amongst different time periods and samples. Division by research intensities of firms is significant in analysing growth, less in the analysis of profitability. Degree of multinationality does not contribute consistently to the explanatory power of the full equation for either dependent variable but nationality of ownership is a consistently powerful explanatory factor. Der vorliegende Artikel analysiert Wachstum und Ertrag der grössten Firmen der Welt in bezug auf Grösse, Grad der Multinationalität, Branche, Nationalität der Mutterfirma und Forschungsintensität. Der Einfluss der Firmengrösse auf das Wachstum ist stabil aber schwach, ihr Einfluss auf die Ertragsfähigkeit unwichtig. Im allgemeinen hängt das Wachstum stark mit der Branche zusammen, während der Brancheneinfluss auf den Ertrag in den verschiedenen Perioden und Stichproben uneinheitlich ist. Die Klassifiziemng der Firmen nach ihrer Forschungsintensität ist signifikant für die Analyse. des Wachstums, aber weniger signifikant für die Analyse des Ertrags. Der Grad der Multinationalität leistet keinen eindeutigen Beitrag zur Erklärung der beiden abhängigen Variablen Wachstum und Ertrag, die Nationalität der Mutterfirma ist hierfür jedoch wichtig. Cet article analyse la croissance et profitabilité des entreprises les plus grandes du monde en se référant ȩ leur grandeur, au degré de multinationalité, aux opérations industrielles principales, ȩ la nationalité de propriété et ȩ I'intensité de recherche. L'influence de la grandeur d'une entreprise sur la croissance est stable mais faible; son influence sur la profitabilité est négligeable. Généralement l'activité industrielle influence fortement la croissance, mais l'effet sur la profitabilité n'est pas consistent parmis les périodes et sondages différents. La classification des entreprises selon leur intensité de recherche est significative pour l'analyse de la croissance, mais moins concluante pour l'analyse de la profitabilité. Le degré de multinationalité ne contribue pas de façon consistente au pouvoir explicatif de l'équation complète pour ni l'une ni l'autre variable dépendante, mais la nationalité de propriété est de façon consistente un important facteur explicatif.

Suggested Citation

  • Peter J. Buckley & John H. Dunning & Robert D. Fearce, 1984. "An Analysis of the Growth and Profitability of the World's Largest Firms 1972 to 1977," Kyklos, Wiley Blackwell, vol. 37(1), pages 3-26, February.
    • Handle: RePEc:bla:kyklos:v:37:y:1984:i:1:p:3-26
    DOI: 10.1111/j.1467-6435.1984.tb00738.x
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    Cited by:

    1. Mihai Mutascu & Aurora Murgea, 2017. "Globalization and financial performances in French cosmetic industry," Working Papers halshs-01504099, HAL.
    2. Harald Oberhofer & Michael Pfaffermayr, 2013. "Firm growth in multinational corporate groups," Empirical Economics, Springer, vol. 44(3), pages 1435-1453, June.
    3. Harald Oberhofer, 2012. "Firm Growth, European Industry Dynamics and Domestic Business Cycles," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(3), pages 316-337, July.
    4. de Jong, Gjalt & van Houten, Jerry, 2014. "The impact of MNE cultural diversity on the internationalization-performance relationship," International Business Review, Elsevier, vol. 23(1), pages 313-326.
    5. Qian, Gongming, 1996. "The effect of multinationality measures upon the risk-return performance of US firms," International Business Review, Elsevier, vol. 5(3), pages 247-265, June.
    6. Pfaffermayr, Michael, 2004. "Export orientation, foreign affiliates, and the growth of Austrian manufacturing firms," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 411-423, July.
    7. Bergner, Sören Martin & Bräutigam, Rainer & Evers, Maria Theresia & Spengel, Christoph, 2017. "The use of SME tax incentives in the European Union," ZEW Discussion Papers 17-006, ZEW - Leibniz Centre for European Economic Research.
    8. Contractor, Farok J. & Kumar, Vikas & Kundu, Sumit K., 2007. "Nature of the relationship between international expansion and performance: The case of emerging market firms," Journal of World Business, Elsevier, vol. 42(4), pages 401-417, December.

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