I am trying to investigate the effect of profitability on firm's cash. I constructed two samples ; one for big firms and second for small firms.
I tried to find the if non liner relationship exists.
for small firms i find
cash = profitability + profitability^2 : both independent variables are negative and significant. is this okay ?? i thought it should be negative for profitability but positive for the square of profitability.
is this okay ? what kind of relationship is this ?
however, for big firms i find that profitability is negative but the square of this independent variable is positive.
your support is always appreciated
Faisal
I tried to find the if non liner relationship exists.
for small firms i find
cash = profitability + profitability^2 : both independent variables are negative and significant. is this okay ?? i thought it should be negative for profitability but positive for the square of profitability.
is this okay ? what kind of relationship is this ?
however, for big firms i find that profitability is negative but the square of this independent variable is positive.
your support is always appreciated
Faisal