Open Access. Powered by Scholars. Published by Universities.®
Business Administration, Management, and Operations
Firm size measures; Total assets; Total sales; Market capitalization; Empirical corporate finance
Articles 1 - 1 of 1
Full-Text Articles in Corporate Finance
Measuring Firm Size In Empirical Corporate Finance, Zhichuan Li, Chongyu Dang, Chen Yang
Measuring Firm Size In Empirical Corporate Finance, Zhichuan Li, Chongyu Dang, Chen Yang
Business Publications
In empirical corporate finance, firm size is commonly used as an important, fundamental firm characteristic. However, no research comprehensively assesses the sensitivity of empirical results in corporate finance to different measures of firm size. This paper fills this hole by providing empirical evidence for a “measurement effect” in the “size effect”. In particular, we examine the influences of employing different proxies (total assets, total sales, and market capitalization) of firm size in 20 prominent areas in empirical corporate finance research. We highlight several empirical implications. First, in most areas of corporate finance the coefficients of firm size measures are robust …