Does Firm Size Matter? An Empirical Study Of Firm Performance In Indonesia

Abstract

This study seeks to understand the relationship between frm size and performance of listed companies in Indonesia during the boom and the bust period. The result shows that generally frm size gives a positive impact to frm proftability. There is signifcant relationship between frm size and performance during post-crisis period. Firm size is an important factor in recovering process. Nevertheless frm size does not afect the frm market value. By employing panel data analysis of 238 listed companies in Indonesia Stock Exchange (IDX) in the period of 19942004, the study shows that institutional factors matter on the frm performance, based on the fact that frm with majority foreign ownership have much higher performance in both measurements, namely, return on asset (ROA) and market capitalization growth.