Profit persistence in the ‘very’ long run: evidence from survivors and exiters

Gschwandtner, Adelina

doi:10.1080/0003684042000337406

Cited by 125 publications

(140 citation statements)

References 12 publications

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“…Those results contradict classical risk theory but are in line with several previous empirical studies (e.g. Gschwandtner, 2005;Enqvist et al, 2014;Pattitoni et al, 2014). The negative effect of financial risk can be explained by the risk-return paradox which states that good management practices can increase ROA and at the same time reduce financial risk (Bowman, 1980).…”

supporting

confidence: 62%

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

Zouaghi¹,

Sánchez

Hirsch

2017

Span. j. agric. res.

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Strategic management research has demonstrated the importance of firm-and industry structure as drivers of firm profitability. However, less is known about how firms´ geographical locations affect profitability. Applying a multi-level approach of hierarchical linear modeling we estimated firm-, industry-, and region-specific effects on profitability of 3,273 agri-food firms operating in different Spanish districts over the time span 2006-2013. The results reveal the dominance of firm-specific effects which contribute up to 48.8% to variance in firm profitability while the contribution of industry effects (0.8-4.2%), geographical location (0.1-1.8%), and year effects (0.1-2.5%) is rather small. Moreover, firm size, risk, and innovative activity turn out as significant profit drivers at the firm level. Although firm-effects outweigh industry-and region-specific factors, the results indicate that industry concentration as well as regional education and unemployment influence profitability. In addition, proximity to technological institutes as well as the degree of urbanization of the region in which a firm operates can be drivers of profitability. Hence, despite the superiority of firm effects the results indicate that agri-food managers should also consider possible advantages from location-based resources in order to ensure competitiveness.Additional keywords: agri-food profits; firm-, industry-, and location effects; hierarchical linear model.

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supporting

confidence: 62%

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

Zouaghi¹,

Sánchez

Hirsch

2017

Span. j. agric. res.

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“…The company size has a critical role in determining profitability (Dilling-Hansen, 2005;Gschwandtner, 2005;Hardwick, 1997;Winter, 1994;Wyn, 1998). Persistence of profitability is greater in larger companies, because compered with smaller companies, the larger ones have more access to resources and consequently they have more flexibility to the changes in a dynamic market.…”

Section: Firm Sizementioning

confidence: 99%

Profitability in Swedish Micro Firms: A Quantile Regression Approach

Salman¹,

Yazdanfar²

2012

IBR

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The purpose of this study is to identify a function for the profitability of Swedish micro firms in the sectors of health, transport, trade and metal. In order to understand how micro firms relate to key variables, such as firm size, growth of sales, productivities, lagged profits, asset turnover and firm's age, OLS (Ordinary Least Squares), and the more robust quantile regression techniques, are used to estimate micro-firm profitability. Data from 2007 is used for this purpose. The results show that growth (competitive condition) and total factor productivity (comparative advantage) have a significant positive effect on micro-firm profitability, and that size (diminishing returns states) is found to have a rather significant negative effect on micro-firm profitability. The results also indicate a strong relationship between microeconomic theory suggestions and micro-firm profitability for the all micro firms except those in the metal sector. Moreover, the quantile regression approach provided a better understanding, regarding the dynamics of the factors that affect profitability, and provided more interesting results than OLS normally do.

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“…firm age, specialization, leverage, and liquidity, which is consistent with previous findings in the persistence of profit literature (e.g. Geroski and Jacquemin, 1988;Gschwandtner, 2005;Mueller, 1977Mueller, , 1990Waring, 1996).…”

Section: Do Firm Idiosyncrasies Matter For Profitability?supporting

confidence: 81%

“…Moreover, although time series models have been seldomly used to forecast profitability, they play the dominant role in the rich persistence of profit literature that employs autoregressive processes as their major work horse (e.g. Geroski and Jacquemin, 1988;Goddard and Wilson, 1999;Gschwandtner, 2005;Mueller, 1986Mueller, , 1990.…”

Section: Introductionmentioning

confidence: 99%

A statistichal equilibrium perspective on corporate profitability

Mundt¹

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Profit persistence in the ‘very’ long run: evidence from survivors and exiters

Cited by 125 publications

References 12 publications

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

What drives firm profitability? A multilevel approach to the Spanish agri-food sector

Profitability in Swedish Micro Firms: A Quantile Regression Approach

A statistichal equilibrium perspective on corporate profitability

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