The paper aims to investigate impacts of the business size on the profit through primary data collated from 495 enterprises randomly chosen in the Mekong Delta. As the results indicate, the profit depends on the business size in the form of a cubic function. Additionally, the ratio of current assets to sales, the sales growth rate, the human resource quality, and the manager’s attitude towards risks have positive relations with the profit. | JED January 2013 | 121 Impacts of the Business Size on the Profit of Enterprises in the Mekong Delta LÊ KHƯƠNG NINH Associate Professor, Doctor of Philosophy, Cần Thơ University Email: lekhuongninh@ NGUYỄN LÊ HOA TUYẾT Bachelor of Art, Cần Thơ University Email: nguyenlehoatuyet@ ABSTRACT The paper aims to investigate impacts of the business size on the profit through primary data collated from 495 enterprises randomly chosen in the Mekong Delta. As the results indicate, the profit depends on the business size in the form of a cubic function. Additionally, the ratio of current assets to sales, the sales growth rate, the human resource quality, and the manager’s attitude towards risks have positive relations with the profit. By contrast, the competitiveness responds negatively to the profit. Especially, impacts of unofficial costs on the profit are the ∩-shape of the square function. Based on estimates, some recommendations to enhance the profit are also provided. Keywords: enterprises, business size, profit, ROS, growth rate, fixed assets, the Mekong Delta. 122 | Lê Khương Ninh Impacts of the Business Size on the Profit of Enterprises 1. INTRODUCTION Profit is the primary target of all enterprises because it helps enterprises survive competition and develop. It has intrigued plenty of researchers who hope to devise a theoretical and empirical model. The paper also sheds light on the fact that profit is also affected by micro- and macro-economic factors. The complicated relationship between the size and the profit is controversial, which intrigues many researchers in the world. As FitzRoy (1989) states, the relation between size and profit was positive due to the economic feature of the size. Yet Goddard et at. (2005) contended the opposite. Amato and Amato (2004), Amato and Burson (2007), Aggrey et al. (2010), and Becker-Blease et al. (2010) proved that size has both positive and negative impacts on profit. In other words, these .
