Faculty Sponsor

Sara Gundersen

College

Arts and Sciences

Department/Program

Economics

Document Type

Poster Presentation

Symposium Date

Spring 5-2-2015

Abstract

India has a labor force of almost 500 million, yet has an unemployment rate of approximately 8.8%. Forty-five million people are unemployed; therefore, making it important to examine what makes a company profitable. Using data provided by an Enterprise Survey questionnaire given to firms in 2006, I evaluate what effects the volume of sales on a firm level. Using SPSS, a theoretical model was tested and then modified to eliminate problems such as heteroskedasticity, multicollinearity, and serial correlation. I find that years in business and access to security have a positive, statistically significant impact on sales, while the firm being located in the owner's house has a negative, statistically significant impact on sales. I argue that the biggest ways to increase sales would be to register the firm with the government, increase employee compensation, and ensure that the firm will have some form of security to protect its assets. If Indian firms are able to become more profitable, the unemployment rate will decrease over time.

Biographical Information about Author(s)

Zachariah Hughes is interested in two fields of economics - development economics and financial economics. In the Fall of 2014, he was given the opportunity in econometrics to perform a regression analysis on any set of data. He chose to combine his two passions and examine financial information and use it to predict profitability of a firm in India.

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