Journal of Management Research
Vol. 23, No. 1 (January - June 2023)
ISSN: 0972-5814 Online ISSN: 0974-455X
Influence of Firm size and Firm Age on Entrepreneurial Performance: An Empirical Study in Pakistan
Tuba Nafees, Muhammad Shafiq and Khalid Hafeez
| Abstract |
The objective of this paper is to investigate the influence of firm age and firm size on entrepreneurial performance in manufacturing companies listed in Lahore Chamber of Commerce. The contextual factors (firm size and firm age) were considered as predicting variables in a firm’s entrepreneurial performance. We used the data from all manufacturing firms listed in Lahore Chamber of Commerce from 2019 to 2020 and used Chi-Square statistical technique through SPSS software. The results suggest that there is a significant positive relationship between firm size and entrepreneurial performance. The study also finds a positive relationship between firm age and entrepreneurial performance. The study has implications mainly for entrepreneurs that increasing firm’s size allows for incremental advantage in profits as size of the firm enables it to raise the entry barriers for potential entrants as described by economic theory. At the same time bigger firms gain advantage of economies of scale to achieve higher profitability. This study adds to the understanding that a company’s financial success can be influenced by its size. In terms of experience and performance improvement, businesses with long years in operation have a competitive edge over new enterprises. It adds to our understanding that older companies may also benefit from brand reputation allowing them to earn bigger profit margin on sales. Also, firms are platforms for entrepreneurs to demonstrate their superior decision- making abilities. Lastly, it contributes to the understanding that small firms operated by sole proprietors or family enterprises are commonly considered as entrepreneurial activities.
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