Does Firm Size Affect the Firm Profitability? Empirical Evidence from Romania

This study advances the understanding of the relationship between firm size and profitability, motivated by the question whether larger firms are more profitable. The nature of the relationship between firm size and firm profitability is examined by on data for 100 firms listed in 2010 at the Bucharest Stock Exchange. The results revealed that firm size has a significant negative influence on firm profitability. Additionally, results showed that leverage is statistically significantly, while liquidity didn’t prove to be an important explanatory variable of firms’ profitability.