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      • Exploring the Growth-Profit-Size Triangle in Hungarian ICT SMEs

        ( Aron Perenyi ) 한국EU학회 2013 Asia-Pacific Journal of EU Studies Vol.11 No.2

        Firm growth, profitability and size relationships are described by economic and firm theory. Gibrat’s Law of proportionate effect states that firm growth is independent of firm size, and a trade-off is expected between firm growth and profitability. An investigation into small firms from the Hungarian ICT sector was conducted. Relationships were hypothesised based on results of prior empirical testing and tested based on cross-sectional data reflecting the opinions of owners and managers of these businesses. Firm size and profitability were positively related to firm growth compared to competitors. Size and profitability showed no significant relationship with firm growth potential. There was no significant relationship between firm size and profitability. Within the context of investigation, these results are acceptable, although rejecting Gibrat’s Law or the predominant assumption of growth-profit trade-off.

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