Hi,
i have run a regression to estimate the impact of couple of variables like growth rate, company size or leverage on the profitability of a firm.
I know that if e.g. the regression coefficient for growth is 0,5 a 1% increase in growth rate would yield a 0,5% increase in profitability if profitability and growth rate are measured in %, too.
My question is: can i also compare the characteristics of a company relative to the average of all comparable other companies?
For example if the average growth rate of a couple of similar companies is 5% and the growth rate of a certain company is 6%: would it be appropriate to conclude, that the profitability should be higher by 0,5 as well? i don't know in how far this interpretation is comparable to the standard if x increases by ... y changes by ...
Thanks for your help!
i have run a regression to estimate the impact of couple of variables like growth rate, company size or leverage on the profitability of a firm.
I know that if e.g. the regression coefficient for growth is 0,5 a 1% increase in growth rate would yield a 0,5% increase in profitability if profitability and growth rate are measured in %, too.
My question is: can i also compare the characteristics of a company relative to the average of all comparable other companies?
For example if the average growth rate of a couple of similar companies is 5% and the growth rate of a certain company is 6%: would it be appropriate to conclude, that the profitability should be higher by 0,5 as well? i don't know in how far this interpretation is comparable to the standard if x increases by ... y changes by ...
Thanks for your help!