Effects of firm size on firm performance of manufacturing firms in Ghana

Abstract

The main objective of the study was to determine the effects of firm size on performance of manufacturing firms in Ghana. The study employed a quantitative research design under the positivist philosophy to address the research objectives.A panel on about 1,203 firms were involved based on the Enterprise Survey for Ghana data set for the periods 2007 and 2013. Multiple measures were adopted for firm size but just one measure was adopted for firm performance. Firm size was proxied by number of employees and real value of total assets while firm performance was proxied by total factor productivity. The Fixed Effectsand Random Effects estimatorswereapplied to the static model.The results indicated that firm size, proxied by the value of assets, has negative effects on firm performance. It was also found that firm size, proxied by total number of employees, has positive effects on firm performance except for the case of small manufacturing firms.