Determinants of Firm Profitability in Africa

2021 ◽  
pp. 097215092110463
Author(s):  
Segun Thompson Bolarinwa ◽  
Anthony Enisan Akinlo ◽  
Uche Lucy Onyekwelu
Keyword(s):  
Generalized Method Of Moments ◽  
Specific Factor ◽  
African Countries ◽  
Firm Level ◽  
Data Set ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Managerial Efficiency ◽  
Level Data

Using a large firm-level data set of 896 firms selected from 27 African countries between 2005 and 2017 and the generalized method of moments (GMM) technique, this study investigates the firm-specific, industry-level, and macroeconomic factors affecting firms’ profitability in Africa. Unlike existing studies that adopt non-standard measures of a firm’s managerial efficiency, this study introduces the standard measure of managerial efficiency into the determinants of a firm’s profitability. The empirical results show that managerial efficiency, size, age, leverage, tangibility, and firm’s growth are significant firm-level determinants of a firm’s profitability in Africa. Similarly, an industry-specific factor of competition exercises a significant effect on a firm’s profitability. However, the role of macroeconomic factors are not validated by the study. Policy recommendations follow the study.

scholarly journals International and Intranational Technological Spillovers and Productivity Growth in China

2009 ◽  
Vol 8 (2) ◽  
pp. 1-23 ◽  
Author(s):  
Xiaolan Fu ◽  
Yundan Gong
Keyword(s):  
Productivity Growth ◽  
Policy Implications ◽  
Firm Level ◽  
Data Set ◽  
Technological Spillovers ◽  
Manufacturing Firm ◽  
Chinese Firm ◽  
Level Data ◽  
International Industry

Technological spillovers from foreign direct investment (FDI) have been regarded as a major source of technical progress and productivity growth. This paper explores the role of international and intranational technological spillovers from FDI in technical change, efficiency improvement, and total factor productivity growth in Chinese manufacturing firms using a recent Chinese manufacturing firm-level panel data set over the 2001–05 period. International industry-specific research and development (R&D) stock is linked to the Chinese firm-level data, international R&D spillovers from FDI and intranational technological spillovers of R&D activities by foreign invested firms in China are examined as well. Policy implications are discussed.

The Optimal Diversification Strategy in Pharmaceutical Industry: Balance-centred or Hetero-centred?

2021 ◽  
pp. 097172182110056
Author(s):  
Keungoui Kim ◽  
Junseok Hwang ◽  
Sungdo Jung ◽  
Eungdo Kim
Keyword(s):  
Business Performance ◽  
Business Environment ◽  
Product Diversification ◽  
Diversification Strategy ◽  
Firm Level ◽  
Data Set ◽  
Pharmaceutical Firms ◽  
Level Data ◽  
Market Product ◽  
High Uncertainty

Due to high uncertainty of product development and business environment, firm-level diversification has been regarded as one of the most effective methods in pharmaceutical firms. In previous study, firm-level diversification was discussed by different value chains of market, product, and technology. However, in most cases, the diversification itself was adopted in a simple manner although its property contains different aspects and the results varies depending on the diversity property of selected index. In addition, the existing approach for measuring firm’s product/market diversification using sales information distinguished by standard industry classification cannot provide direct implication as different strategies are made for market and product diversification. Therefore, this study examines the effects of firm-level diversification on business and innovation performances in pharmaceutical firms by considering (1) three diversification types: market, product, and technology, (2) clear separation between market and product diversification, and (3) two diversification perspectives: balance-centred and hetero-centred. For empirical analysis, an integrated firm-level data set combining from Medtrack, Orange Book, Compustat and Total Patent database is used. From the result, in case of market diversification, less market heterogeneity causes significant influence on business performance. For product and technology, a concentrated and greater heterogeneity of product diversification are turned out to promote business performance, while the more intensive and heterogeneous technology diversification has been shown to improve innovation performance.

Pre-Entry Experience, Postentry Adaptations, and Internationalization in the African Mobile Telecommunications Industry

2021 ◽  
pp. 1-22
Author(s):  
Mohammad Jahanbakht ◽  
Romel Mostafa ◽  
Francisco Veloso
Keyword(s):  
Low Income ◽  
Telecommunications Industry ◽  
Mobile Telecommunications ◽  
African Countries ◽  
Firm Level ◽  
Operational Conditions ◽  
Adaptive Capabilities ◽  
Level Data ◽  
Start Ups ◽  
Mobile Telecommunications Industry

We study the evolution of the African mobile telecommunications industry from its effective beginning and explore the sources of ownership advantages among indigenous firms, by assembling historical qualitative and quantitative firm-level data. Our historical qualitative findings suggest that a few start-ups gained industry-specific knowledge through their pre-entry experience, directed their postentry development of capabilities toward adaptations to challenging market and operational conditions, and leveraged their adaptive capabilities to enter and compete in other African countries. Using our quantitative panel data, we show that these firms successfully internationalized across the continent. In particular, compared with other start-ups, they had higher rates of foreign entry in African countries that had relatively weaker rule of law, and greater market reach in African countries that had relatively larger low-income consumer segments. These patterns corroborate that their capabilities for overcoming the industry’s challenging market and operational conditions were their key ownership advantages. Through our triangulated analysis, we show that inherited industry knowledge provides a foundation for postentry capability development, and entrepreneurial leadership guides this process to create ownership advantages for regional internationalization.

The effect of industry association on firm innovation in Chinese private ventures

2019 ◽  
Vol 57 (9) ◽  
pp. 2414-2435
Author(s):  
Wenge Zhang ◽  
Jun Li ◽  
Yiyuan Mai
Keyword(s):  
Moderating Effects ◽  
Firm Level ◽  
Firm Innovation ◽  
Data Set ◽  
Industry Association ◽  
Content Type ◽  
Emerging Industries ◽  
Practical Implications ◽  
Firm Learning

Purpose The purpose of this paper is to examine the relationship between industry association membership and firm innovation in Chinese private ventures. A secondary objective is to investigate potential moderating effects of firm learning practices and founder characteristics on the above relationship, and to draw out implications for policymakers and practitioners. Design/methodology/approach The paper utilizes data from a sample of 567 Chinese entrepreneurial firms operating in 9 designated emerging industries. Hierarchical regression models were employed to analyze the effect of industry association membership on firm innovation, and the potential moderating effects. A 2SLS procedure was adopted to control for potential endogeneity issue. Supplemental analyses were conducted to ensure the robustness of the findings. Findings The paper provides empirical insights about how industry association membership, along with firm learning practice and founder leadership, affect firm innovation in Chinese private ventures in emerging industries. It suggests that industry association membership positively affects firm innovation. Further, there is a three-way interaction effect of industry association membership, learning practice and founder power on innovation. Research limitations/implications Due to the design of the data set, there are some limitations. First, the study only considered whether a firm belongs to an industry association, but not the nature of such membership (length, firm status in the association, etc.). Second, the cross-sectional design may limit the power of the study to make casual implications about the tested relationships. Practical implications The paper provides important practical implications for policymakers and entrepreneurs in China. In general, the results suggest that private ventures pursuing innovation in emerging industries can benefit from industry associations, and entrepreneurs shall actively engage in firm-level and personal-level learning. For policymakers, the study suggests that to foster innovation in an emerging industry, special attention shall be paid to building necessary institutional support to develop and to strengthen the role of industry association in the industry. Originality/value This paper fulfills an important gap in the literature in that it is one of the first, which investigates the role of the industry association in firm innovation, especially in a non-western context. This paper provides new insights into the role of industry association and firm innovation in an under-researched developing economy context.

scholarly journals Pola Perdagangan Global pada Perusahaan-Perusahaan Berteknologi Tinggi

2021 ◽  
Vol 21 (1) ◽  
pp. 77-94
Author(s):  
Dyah Wulan Sari ◽  
Wenny Restikasari
Keyword(s):  
Generalized Method Of Moments ◽  
High Tech ◽  
Global Trade ◽  
Trade Integration ◽  
Method Of Moment ◽  
Export Intensity ◽  
Firm Level ◽  
Level Data ◽  
Vertical Trade ◽  
Generalized Method Of Moment

This study deals with firm level data of Indonesian high-tech manufacturing industries to determine firm’s production, especially among global trade variables, such as export intensity, vertical trade integration, and two-way trade. This study employs a generalized method of moments (GMM) approach to examine the most important factors of a global trade phenomenon. In the full-sample, the result demonstrates that vertical trade integration and two-way trade are significant determinants on firm’s production while export intensity is not. In ordinary trader sub-sample, export intensity is a significant determinant of firm’s production, whereas in vertical trader sub-sample export intensity is not. ........................................... Penelitian ini menggunakan data tingkat perusahaan pada industri manufaktur berteknologi tinggi di Indonesia untuk menentukan kemampuan produksi suatu perusahaan, dari berbagai variabel perdagangan global, seperti intensitas ekspor, perdagangan vertikal yang terintegrasi, dan perdagangan dua arah terhadap. Penelitian ini menggunakan pendekatan generalized method of moment (GMM) untuk menguji faktor terpenting dari fenomena perdagangan global. Pada sampel penuh, hasil penelitian menunjukkan bahwa perdagangan vertikal yang terintegrasi dan perdagangan dua arah merupakan faktor penentu yang signifikan terhadap kemampuan produksi perusahaan sedangkan intensitas ekspor tidak. Pada sub-sampel pedagang biasa, intensitas ekspor merupakan faktor penentu yang signifikan terhadap kemampuan produksi perusahaan, sedangkan pada sub-sampel pedagang vertikal intensitas ekspor bukan merupaka faktor penentu. 

scholarly journals Credit composition and income inequality in Vietnam: an empirical analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Le Quoc Hoi ◽  
Hương Lan Trần
Keyword(s):  
Income Inequality ◽  
Educational Level ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Primary Data ◽  
Data Set ◽  
Content Type ◽  
Private Credit ◽  
The Impact

PurposeThis paper aims to examine the credit composition and income inequality reduction in Vietnam. In particular, the authors focus on the distinction between policy and commercial credits and investigate whether these two types of credit had adverse effects on income inequality. The authors also examine whether the impact of policy credit on income inequality is conditioned by the educational level and institutional quality.Design/methodology/approachThe authors use the primary data set, which contains a panel of 60 provinces collected from the General Statistics Office of Vietnam from 2002 to 2016. The authors employ the generalized method of moments to solve the endogenous problem.FindingsThe authors show that while commercial credit increases income inequality, policy credit contributes to reducing income inequality in Vietnam. In addition, we provide evidence that the institutional quality and educational level condition the impact of policy credit on income inequality. Based on the findings, the paper implies that it was not the size of the private credit but its composition that mattered in reducing income inequality, due to the asymmetric effects of different types of credit.Originality/valueThis is the first study that examines the links between the two components of credit and income inequality as well as constraints of the links. The authors argue that analyzing the separate effects of commercial and policy credits is more important for explaining the role of credit in income inequality than the size of total credit.

scholarly journals Job Quality In The Micro And Small Business Sector In Ethiopia: Evidence From Firm-Level Data

2021 ◽  
Author(s):  
Berihu Assefa Gebrehiwot
Keyword(s):  
Poverty Reduction ◽  
Occupational Safety ◽  
Job Creation ◽  
Job Quality ◽  
Small Enterprises ◽  
Firm Level ◽  
Highly Educated ◽  
Level Data ◽  
Micro And Small Enterprises

Abstract Using a large dataset from the 10 largest cities in Ethiopia, this paper studies what entrepreneurial characteristics and attributes contribute to quality job creation in the micro and small enterprises (MSE) sector. We measure job quality in two ways – i) using wage and contract, and ii) health and occupational safety variables. We find that micro and small enterprises that create quality jobs tend to be operated by highly educated and experienced entrepreneurs. This highlights the role of human capital in quality job creation and poverty reduction. Further, we find that micro and small enterprises that create quality jobs tend to be larger in size and managed by professionally recruited managers.

Capital Account Liberalization and Firm Innovation: Worldwide Evidence

2021 ◽  
pp. 0148558X2110594
Author(s):  
Fangfang Hou ◽  
Xinpeng Xu
Keyword(s):  
Positive Impact ◽  
Set Covering ◽  
Capital Account ◽  
Legal Environment ◽  
Firm Level ◽  
Firm Innovation ◽  
Capital Account Liberalization ◽  
Data Set ◽  
Innovation Output

This study investigates whether capital account liberalization, a leading characteristic of globalization, is associated with firms’ future innovation output. Employing a novel firm-level panel data set covering 41 countries over two decades, we show that capital account liberalization is significantly associated with higher corporate patenting activities, particularly for firms from innovation-intensive industries. Further analyses show that the effect is stronger among firms from economies in a better legal environment, signifying the important role of good institutional quality in facilitating the positive impact of liberalization. The effect is also stronger among firms with higher initial productivity, consistent with the “productivity” hypothesis, according to which bigger and more productive firms generate more innovation after liberalization. Our findings are robust to the use of various measurements, subsamples, and estimation models. This study provides global firm-level evidence of the real economic impact of financial globalization.

scholarly journals Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923

2019 ◽  
Vol 79 (1) ◽  
pp. 1-31 ◽  
Author(s):  
Tetsuji Okazaki ◽  
Toshihiro Okubo ◽  
Eric Strobl
Keyword(s):  
Creative Destruction ◽  
Manufacturing Industries ◽  
Firm Level ◽  
Machine Technology ◽  
Kanto Earthquake ◽  
Level Data ◽  
Firm Level Data ◽  
Before And After

The Great Kanto Earthquake occurred on 1 September 1923 and inflicted serious damage on Yokohama City. About 90 percent of the factories in Yokohama City were burnt down or completely destroyed. However, these manufacturing industries appear to have swiftly recovered in the aftermath of the damage. This article investigates the role of creative destruction due to the Great Kanto Earthquake. Using firm-level data on capital (horsepower of motors) before and after the earthquake, we find substantial creative destruction, that is, upgrade of machine technology and/or survival of efficient firms. We find further collaborating evidence of this at the prefecture level.

scholarly journals Returns to compensation in trucking: Does safety pay?

2019 ◽  
Vol 30 (2) ◽  
pp. 262-284 ◽  
Author(s):  
Michael R Faulkiner ◽  
Michael H Belzer
Keyword(s):  
Net Present Value ◽  
Retention Rates ◽  
Firm Level ◽  
Data Set ◽  
Motor Carrier ◽  
Level Data ◽  
Motor Carrier Industry ◽  
The Us ◽  
Before And After ◽  
Trucking Companies

Large truck crashes remain a significant problem in the truckload sector of the US motor carrier industry. Employing a unique firm-level data set from a large US truckload motor carrier, we identified two different driver groups hired during two distinct pay regimes. Before-and-after data on wages and safety outcomes created a natural experiment. Higher wages paid to experienced drivers in the new pay regime led to higher driver retention rates. Experienced drivers had lower average crash costs and were more productive during each tenure month. Experienced drivers had a much larger expected discounted net present value when compared with inexperienced drivers. As the previously inexperienced drivers gained additional experience, their crash probabilities and their value began to mirror those of the experienced drivers, demonstrating the value of greater tenure. This research supports ‘safe rates’ public policy because safety pays – for trucking companies, for cargo owners and for society. JEL Codes: J24, J28, J33

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