DOES FIRM SIZE MATTERS FOR FIRM GROWTH? EVIDENCE FROM THE ROMANIAN HEALTH SECTOR

We test the nonlinear relationship between firm growth and size within a panel quantile regression framework. Our analysis covers 545 firms operating in the Romanian health care sector and the timespan is 2007 to 2015. We use Canay?s (2011) fixed-effect quantile panel data approach to assess the nonlinear, asymmetric influence that firm size has on firm growth. The firm growth is measured in terms of investment dynamics and number of employees. Our findings show an obvious negative influence of size on growth, proving that small firms grow faster. Further, the impact of firm size increases for upper quantiles, meaning that size matters even more for firms that record higher growth rates. Our results are robust to different samples and empirical investigations and indicate the need to encourage the activity of small firms in the Romanian health industry.