An exploratory factor analysis of firms endogenous growth measures

Abstract

Purpose: This study attempts to standardize firm endogenous growth measures by performing exploratory factor analysis on nine firm endogenous growth measures (equity book value, equity market value, working capital, stock R&D investments, stock advertisement investment, stock capital asset investment, operating expenses, sales revenue, and the number of employees). Methodology: Data was generated by pooling a panel dataset of 116 firms and13 years timespan data. Main Findings: The result of the analysis reveals three underlying firm growth factors (namely firm financials, operations, and capabilities) representing the initial nine growth measures. Implications/Applications: The results of this research can be used as the bases for further research in firm endogenous growth model analysis.