Do profitable start-up firms grow faster? Evidence from Colombia
This study explores the impact of profitability on the growth of start-up firms. Using data on start-up firms in Colombia, we examine the relationship between firm growth and profitability. We provide evidence that start-up firms with higher profitability increase their total assets. However, we fin...
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| Format: | Article |
| Language: | English |
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Universidad Nacional de Colombia
2018-12-01
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| Series: | Cuadernos de Economía |
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| Online Access: | https://revistas.unal.edu.co/index.php/ceconomia/article/view/69123 |
| Summary: | This study explores the impact of profitability on the growth of start-up firms. Using data on start-up firms in Colombia, we examine the relationship between firm growth and profitability. We provide evidence that start-up firms with higher profitability increase their total assets. However, we find little evidence that profitability positively affects sales growth for start-up firms. In contrast, the results provide support for the notion that profitability is derived from sales growth. Furthermore, we find that firm growth depends heavily on firm age during the start-up stage. |
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| ISSN: | 0121-4772 2248-4337 |