Size and performance : an empirical study of the Jordanian manufacturing-publicly-held companies

Abstract EN

-There is a strong belief among managers and researchers that the key to profitability is size or market share.

That is the bigger the firm, the larger the profits and the resulting return on assets.

The profit improvement of market strategies (PIMS) projects showed a strong, direct relationship between market share and return on assets (RQA) for the firms studied, in the western world.

The Hypothesis that "performance is a function of size” has been tested for the Jordanian manufacturing Publicly-held Companies, using a cross tab analysis.

Moreover, a comparative analysis has been used to test the above hypothesis and to investigate whether Roche’s “V-curve” theory adequately depicts the companies under investigation.

The result of this study raises a number of issues concerning the size-performance relationship.

The results of the study do not confirm the hypothesis that there is a positive relationship between the size of the company and its performance.

Moreover, the results showed that Roche's theory does have some validity in the industries studied, in the sense that the largest companies still performed good in general although their performance is not good as the smallest ones.