Growth or profitability first? The case of small and medium-sized Canadian enterprises

This Industry Canada study sheds new light on the nature of the relationship between growth and profitability for Canadian SMEs.

KEY FINDINGS:

  • A firm with a high level of profitability and a low level of growth has a greater chance of subsequently achieving high growth and high profitability than a firm with a high level of growth and a low level of profitability.
  • Human capital is a determining factor as it plays a positive role in a firm achieving superior performance in both growth and profitability. A firm's debt is also a significant factor that can slow progress.
  • The results of model estimations show that a firm's age has no effect on the evolution of its situation in terms of growth and profitability.

Read Industry Canada’s Growth or Profitability First? The Case of Small and Medium-Sized Enterprises in Canada.

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CPA Canada


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