I got a recommendation about using firm size and firm age as a control variable for my research. But I still confused why both variables used as a control variable, meanwhile in my research proposal I used them as an independent variable. Thankyou for any helps, this means a lot to me.
Setting variables as either controlling or independent variables, depends to the type of the research you are conducting and the variables that affect the study and how they affect it. This means, researcher sets variables that he/she thinks their absence or presence may have effect to the result or may lead to get the biased result. For example, in Accounting you may decide to test on how the growth or the size of the firm can affect the performance. Here you will not use size/growth as controlling variables. So, it depends with what are you going to test and it can be affected by which variables that could lead to biased results. I sometimes use size and growth as independent variables and test their strength and they seem good. What can help you is testing the genuiness of using them, and you can run the test to prove their prevalence in your study with their effects, when used as controlling variables and when used as independent variables. So, don’t hesitate to use them as independent variables, but first of all think about your study and study needs. I mean the study also will tell you the use of the variables.
Thank you.
It depends on the objectives of your study. You can use firm size, firm age, etc. as control variables only if you have not already considered them in your study, according to your study objectives, as other kinds of variables (independent or dependent). That is, you use a control variable if it is constant and unchanged throughout your testing. If you don't do that, such control variables could significantly affect your study results.
First, this is not a fixed rule using the size or age of the company as an interactive variable.
Second: The age of the company or size is used because it does not contain major dimensions that act as an intermediate variable that can directly affect the dependent variable.
Third, in experimental corporate finance research, company size is commonly used as an important and fundamental feature of the company. However, no paper provides a comprehensive assessment of the sensitivity of empirical findings in corporate finance to the various measures of firm size.
The performance of the firm depends on those variables. So these variables are used as cintrol variable.