The Dynamics of the Profitability and Growth of Restaurants; The Case of Norway

The restaurant industry is quite similar across borders. It a labour-intensive that important for tourism and employment. consists mainly of many small businesses are regionally dispersed. There studies have analysed this sector. However, rather few articles focused on the dynamics growth profit. purpose paper to apply theory profit persistence law proportionate effect (LPE) Norwegian restaurants by using publicly available public panel data from 2010 2019. sample includes 866 restaurants. One finding Gibrat’s does not seem hold, meaning independent size firms. Small grow faster than others, they also more profitable. some degree in industry. Profitability negatively linked debt ratios but positively related working capital. study shows there trade-off between These findings useful others (public planning, lenders, more).