scholarly journals SECTORAL AND FIRM-LEVEL DETERMINANTS OF PROFITABILITY: A MULTILEVEL APPROACH

2018 ◽  
Vol 6 (2) ◽  
Author(s):  
Ivana Blažková ◽  
Ondřej Dvouletý
Keyword(s):  
Growth Rate ◽  
Market Share ◽  
Positive Impact ◽  
Market Concentration ◽  
Firm Level ◽  
Size Number ◽  
Firm Profitability ◽  
Negative Effect ◽  
Equity Ratio ◽  
Food And Drink

The paper aimed to contribute to the literature on the determinants of firm profitability, from the perspective of the Czech economy. We followed a multilevel/hierarchical approach towards the analysis of the sectoral and firm-level determinants of the profitability of companies operating in the Czech food processing industry during years 2005-2012 (622 Firms in 10 Sectors). We assessed an impact of industry (i.e. market concentration, sector growth rate and growth rate of imports) and firm-level characteristics (i.e. market share, firm age, firm size, number of employees, debt/equity ratio and short-term risk) on the return on assets (ROA). Surprisingly, there were no substantial differences between the separate models for industry and firm-level determinants and a combined one. We found a positive impact of market concentration and market share and a negative effect of age and risk-taking behaviour on a firm profitability. Based on these findings, managers in the Czech food and drink industry should pay more attention to the debt policy.

scholarly journals Sectoral and Firm-Level Determinants of Profitability: A Multilevel Approach

2018 ◽  
Vol 6 (2) ◽  
pp. 32-44 ◽  
Author(s):  
Ivana Blažková
Keyword(s):  
Growth Rate ◽  
Market Share ◽  
Positive Impact ◽  
Market Concentration ◽  
Firm Level ◽  
Size Number ◽  
Firm Profitability ◽  
Negative Effect ◽  
Equity Ratio ◽  
Food And Drink

Abstract The paper aimed to contribute to the literature on the determinants of firm profitability, from the perspective of the Czech economy. We followed a multilevel/hierarchical approach towards the analysis of the sectoral and firm-level determinants of the profitability of companies operating in the Czech food processing industry during years 2005-2012 (622 Firms in 10 Sectors). We assessed an impact of industry (i.e. market concentration, sector growth rate and growth rate of imports) and firm-level characteristics (i.e. market share, firm age, firm size, number of employees, debt/equity ratio and short-term risk) on the return on assets (ROA). Surprisingly, there were no substantial differences between the separate models for industry and firm-level determinants and a combined one. We found a positive impact of market concentration and market share and a negative effect of age and risk-taking behaviour on a firm profitability. Based on these findings, managers in the Czech food and drink industry should pay more attention to the debt policy.

scholarly journals Does the oligopolistic position of banks affect the performance of the banking sector in the Federation of Bosnia and Herzegovina?

2021 ◽  
Vol 13 (2) ◽  
pp. 113-131
Author(s):  
Almir Alihodžić
Keyword(s):  
Growth Rate ◽  
Bosnia And Herzegovina ◽  
Concentration Index ◽  
Banking Sector ◽  
Positive Impact ◽  
Market Concentration ◽  
Return On Assets ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Negative Effect

The level of banking concentration has increased significantly in the banking sector of Bosnia and Herzegovina as a result of the successful completion of privatization, the formation of new banks, the slow transition and rapid liberalization. Rapid liberalization has introduced strong competition in the domestic banking sector on the one hand, while there has been an increased concentration of some larger banks in the system. The main goal of this research will be to analyze the correlation between the basic measures of the oligopolistic position of banks and their impact on improving or deteriorating the performance of domestic banks, such as return on assets (ROA), return on equity (ROE) and net interest margin (NIM). The survey period covers the years from 2008: Q1 to 2020: Q4 on a quarterly basis. The following variables were used as independent variables in the model: HHI market concentration index in the context of loans, share of foreign banks in the total ownership structure of banks (FB), bank size (BS) and growth rate of total loans (GRTL).The interdependence of variables in this study was tested via the OLS regression model. The results showed that the foreign-owned Banks (FB) variable has a positive impact on the variable return on Assets (ROA), while the variables bank size (BS) and market concentration index for loans (HHI) have a negative impact. The result also showed that the two variables the growth rate of total loans (GRTL) as well as foreign-owned banks (FB) have a positive impact on the variable return on equity (ROE), while the variables market concentration index for loans (HHI) and bank size (BS) have a negative effect. The third result is that the variable net interest margin (NIM) has the strongest positive impact on the two variables foreign-owned banks (FB) and credit growth rate (GRTL), while concentrations for credit placements (HHI) and bank size (BS) have a negative effect.

SMEs' Access to Innovation Finance. An Analysis of Public Funds in Piedmont

2012 ◽  
pp. 39-60
Author(s):  
Mario Calderini ◽  
Francesca Silvia Rota
Keyword(s):  
Legal Status ◽  
Positive Impact ◽  
Firm Level ◽  
Public Funds ◽  
Step Procedure ◽  
Negative Effect ◽  
Using Data ◽  
Framework Conditions

Using data on public funds in Piedmont, the article argues that SMEs' access to innovation finance is influenced by firm-level determinants, as well as by framework conditions. Use of a Heckman two-step procedure shows that internal determinants are more relevant than external ones represented by relationships with local academia, industry, and governance domains. Legal status and sector, in particular, prove to perform a major role in determining both the likelihood of fund access and the intensity of fund transfers. Revenue too is important, though with a negative effect, while size has a positive impact on fund access alone.

scholarly journals Market Structure and Determinants of Firm Profitability on General Insurance Industry in Indonesia

2021 ◽  
Vol 16 (1) ◽  
pp. 26-41
Author(s):  
Arintoko ◽  
Abdul Aziz Ahmad ◽  
Siti Nur Habibah
Keyword(s):  
Panel Data ◽  
Market Structure ◽  
Market Share ◽  
Insurance Industry ◽  
Series Data ◽  
Debt Ratio ◽  
Significant Negative Effect ◽  
General Insurance ◽  
Firm Profitability ◽  
Negative Effect

Abstract The purpose of this study is to analyze the market structure of the general insurance industry in Indonesia and the effect of market share, operating expenses to operating income (OEOI), and debt ratio(DR) on profitability measured by return on assets (ROA). This study uses panel data regression analysis with the Chow and Hausman test to determine the best model. This analysis uses a combination of cross-section data, which consists of 11 companies, and time-series data, which consists of five years. The results showed that the Indonesian general insurance industry in 2014-2018 took the form of a tight oligopoly with a high concentration level after being analyzed through the four-firm concentration ratio (CR4) and Herfindahl-Hirschman Index (HHI). The average CR4 ratio is 84.77%, while the value of HHI is 3,374.19. Meanwhile, the results showed that based on panel data analysis, the OEOI variable has a significant negative effect on firm profitability. Also, the debt ratio variable has a significant negative effect on the profitability of general insurance firms in Indonesia. The firm efficiency can be able to increase profits rather than mastery of market share.

scholarly journals Advertising, Market Share, And Profitability In The Greek Consumer Industry

2011 ◽  
Vol 3 (9) ◽  
Author(s):  
Zoe Ventoura–Neokosmidi
Keyword(s):  
Cross Section ◽  
Market Share ◽  
Empirical Investigation ◽  
Explanatory Variable ◽  
Positive Impact ◽  
The Other ◽  
Firm Profitability ◽  
Fast Moving Consumer Goods ◽  
The Relationship ◽  
Section Analysis

An empirical investigation of the relationship between advertising to sales ratio, market share and firm profitability was carried out. Cross section analysis was used over 36 companies that produce fast moving consumer goods, for the year 2002. This paper finds that market share has a positive impact on firm profitability. In contrast to our expectation, the influence of market share is greater than that of advertising to sales ratio. To further examine the contribution of each explanatory variable after the other has been included in the model, the partial F?test was used. The obtained results verify the cross section analysis results.

scholarly journals Foreign Aid, Corruption, Economic Growth Rate and Development Index in Nigeria: The ARDL Approach

2020 ◽  
Vol 11 (5) ◽  
pp. 348
Author(s):  
Amenawo Ikpa Offiong ◽  
Glory Sunday Etim ◽  
Rebecca Oliver Enuoh ◽  
Stephen Ekpo Nkamare ◽  
Godwin Bassey James
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Foreign Aid ◽  
Human Development ◽  
Human Development Index ◽  
Positive Impact ◽  
Economic Growth Rate ◽  
Development Index ◽  
Ex Post ◽  
Negative Effect

Foreign aid when properly utilized is expected to grow the economy of the receiving nation. Over the years Nigeria has benefitted from foreign aid inflows in a bid to stabilize its economy and build its infrastructure. This study desires to look into how the various foreign aid components (humanitarian aids, project aids and programme aids) have impacted the Nigerian economic growth rate and human development index giving the prevailing corruption index in the country as a moderating variable. Ex-post facto research design was adopted and data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin from 1990 to 2019. The study adopted autoregressive distributive lag (ARDL) techniques. It was revealed that as a result of the corruption perception index, there was a significant negative effect of foreign aid on the growth rate of Nigeria economy in the long run, while having a significant positive impact on human development index as well. In short run, foreign aids had a significant positive effect on the growth rate of the Nigerian economy, but an insignificant negative effect on human development index. However, government is encouraged to ensure that foreign aid is effectively channeled into agriculture, health, education and other productive areas.

Wages in Imperfect Markets: A Post-reforms Study of Indian Manufacturing

2019 ◽  
Vol 14 (3) ◽  
pp. 257-280
Author(s):  
Ashish Kumar Sedai
Keyword(s):  
Wage Inequality ◽  
Empirical Studies ◽  
Wage Growth ◽  
Market Concentration ◽  
Manufacturing Industries ◽  
Imperfect Markets ◽  
Firm Level ◽  
Negative Effect ◽  
The Impact ◽  
Positive Effect

This study analyzes the effects of structural market imperfections on wage growth in the Indian manufacturing following concerns over wage inequality post economic reforms, 1991. Using firm-level sales, expenditure, and wage data, we construct indices for market concentration, mark-up, and wage growth for 22 three-digit manufacturing industries for the period 1999–2016. Preliminary observations show falling wage shares in 18 industries, a rising level of concentration in all the industries and a fluctuating mark-up across the period confirming the results of other empirical studies. A panel regression shows that the impact of imperfect markets on wage growth is dialectical: an increase in market concentration has a positive effect on wage growth, whereas an increase in mark-up has a negative effect. The study finds that having fewer firms in a market is more beneficial for wage growth, given that there are prudential regulations to check monopoly behaviour. The study recommends that the Competition Commission of India incorporates these wage concerns when deciding to prohibit the abuse of dominant positions.

Impact of Determinants of Industrial Development on Employment and Wages in Indian Manufacturing

2020 ◽  
pp. 18-30
Keyword(s):  
Technical Efficiency ◽  
Total Factor Productivity ◽  
Technical Change ◽  
Positive Impact ◽  
Manufacturing Sector ◽  
Factor Productivity ◽  
Firm Level ◽  
Employment Level ◽  
The Impact ◽  
Level Performance

ABSTRACT The present study was undertaken to explore the evolution of the impact of firm-level performance on employment level and wages in the Indian organized manufacturing sector over the period 1989-90 to 2013-14. One of the major components of the economic reform package was the deregulation and de-licensing in the Indian organized manufacturing sector. The impact of firm-level performance on employment and wages were estimated for Indian organized manufacturing sector in major sub-sectors in India during the period from 1989-90 to 2013-14 of the various variables namely profitability ratio, total factor productivity change, technical change, technical efficiency, openness (export-import), investment intensity, raw material intensity and FECI in total factor productivity index, technical efficiency, and technical change. The study exhibited that all explanatory variables except profitability ratio and technical change cost had a positive impact on the employment level. Out of eight variables, four variables such as net of foreign equity capital, investment intensity, TFPCH, and technical efficiency change showed a positive impact on wages and salary ratio and rest of the four variables such as openness intensity, technology acquisition index, profitability ratio, and technical change had negative impact on wages and salary ratio. In this context, the profit ratio should be distributed as per the marginal rule of economics such as the marginal productivity of labour and capital.

Indian Life Insurance Market and Corporate Performances: A Study of Selected Firms

2016 ◽  
Vol 4 (1) ◽  
Author(s):  
Joy Chakraborty ◽  
Partha Pratim Sengupta
Keyword(s):  
Market Share ◽  
Life Insurance ◽  
Market Concentration ◽  
Insurance Market ◽  
Insurance Companies ◽  
Insurance Company ◽  
Life Insurance Company ◽  
Insurance Sector ◽  
Life Insurers ◽  
Company Limited

In the pre-reform era, Life Insurance Corporation of India (LICI) dominated the Indian life insurance market with a market share close to 100 percent. But the situation drastically changed since the enactment of the IRDA Act in 1999. At the end of the FY 2012-13, the market share of LICI stood at around 73 percent with the number of players having risen to 24 in the countrys life insurance sector. One of the reasons for such a decline in the market share of LICI during the post-reform period could be attributed to the increasing competition prevailing in the countrys life insurance sector. At the same time, the liberalization of the life insurance sector for private participation has eventually raised issues about ensuring sound financial performance and solvency of the life insurance companies besides protection of the interest of policyholders. The present study is an attempt to evaluate and compare the financial performances, solvency, and the market concentration of the four leading life insurers in India namely the Life Insurance Corporation of India (LICI), ICICI Prudential Life Insurance Company Limited (ICICI PruLife), HDFC Standard Life Insurance Company Limited (HDFC Standard), and SBI Life Insurance Company Limited (SBI Life), over a span of five successive FYs 2008-09 to 2012-13. In this regard, the CARAMELS model has been used to evaluate the performances of the selected life insurers, based on the Financial Soundness Indicators (FSIs) as published by IMF. In addition to this, the Solvency and the Market Concentration Analyses were also presented for the selected life insurers for the given period. The present study revealed the preexisting dominance of LICI even after 15 years since the privatization of the countrys life insurance sector.

scholarly journals Impact of Economic Freedom on Corruption Revisited in ASEAN Countries: A Bayesian Hierarchical Mixed-Effects Analysis

Economies ◽  
2021 ◽  
Vol 9 (1) ◽  
pp. 3
Author(s):  
Nguyen Ngoc Thach ◽  
Bui Hoang Ngoc
Keyword(s):  
Economic Freedom ◽  
Positive Impact ◽  
Mixed Effects ◽  
Random Coefficients ◽  
Bayesian Hierarchical ◽  
Country Level ◽  
Corruption Index ◽  
Negative Effect ◽  
Economic Freedom Index ◽  
Asean Countries

Conceptual and applied studies assessing the linkage between economic freedom and corruption expect that economic freedom boosts economic growth, improves income, and reduces levels of corruption. However, most of them have concentrated on developed and developing groups, while Association of Southeast Asian Nations (ASEAN) countries have drawn much less attention. Empirical findings are most often conflicting. Moreover, previous studies performed rather simple frequentist techniques regressing one or some freedom indices on corruption that do not allow for grasping all the aspects of economic freedom as well as capturing variations across countries. The study aims to investigate the effects of ten components of economic freedom index on the level of corruption in ten ASEAN countries from 1999 to 2018. By applying a Bayesian hierarchical mixed-effects regression via a Monte Carlo technique combined with the Gibbs sampler, the obtained results suggest several findings as follows: (i) In view of probability, the predictors property rights, government integrity, tax burden, business freedom, labor freedom, and investment freedom have a strongly positive impact on the response perceived corruption index; (ii) Government spending, trade freedom, and financial freedom exert a strongly negative effect, while the influence of monetary freedom is ambiguous; (iii) There is an existence of not only random intercepts but also random coefficients at the country level impacting the model outcome. The empirical outcome could be of major importance for more efficient corruption controlling in emerging countries, including ASEAN nations.

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