Growth was derived by taking the lo

Growth was derived by taking the log of changes in sales. According to Jovanovic
(1982), firms that grow experience increasing profitability while those making losses
contract and eventually exit the market. Frank (1988) suggests that recent growth is a
good indicator of the firm’s performance expectations and hence implies a positive
correlation between firm’s survival and recent growth. The results of the regression
support previous literature findings and show that growth does influence operating
performance of the New Zealand listed companies during the period of 1996-2007.
Growth plays a key role in explaining operating performance based on the Return on
Assets variable. However the risk adjusted measures do not pick up the growth variable,
possibly indicating that after controlling for the higher returns expected of risky firms
growth does not play a role in explaining firm performance or survival.
According to Return on Assets measure of operating performance growth was one of
the most important firm factors affecting operating performance. (See table 3) This
implies growth firms tended to survive and sustain healthier operating performance than
value firms during 1996 -2007. Net Asset measure of operating performance shows
positive association at 1 % significance level. Although the significance level of the
relationship is strong, I would rather view the relationship as marginal due to other two
metrics of operating performance not being associated with the growth variable.