Profitability and Its Determinants in Turkish Manufacturing Industry: Evidence from a Dynamic Panel Model

Işık, Özcan; Tasgin, Umit Firat

doi:10.5539/ijef.v9n8p66

Cited by 23 publications

(21 citation statements)

References 38 publications

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“…A large standard deviation tells us about a large variability in profitability of the selected Serbian medium-sized enterprises. A similar result is obtained for Turkish manufacturing firms showed by Isik and Tasgin (2017). Each variable also exhibits substantial skewness (i.e., a large mean relative to the median).…”

Section: Resultssupporting

confidence: 81%

Liquidity profitability trade-off: Evidence from medium enterprises

Stevanović¹,

Minović²,

Ljumović³

2019

Manage: J. Sustainable Bus. Manage, Solutions Emerging Econ.

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Research Question: This paper examines the impact of liquidity on the profitability of the Serbian polluting medium sized enterprises. Motivation: We study the impact of traditional liquidity indicators and indicators based on cash flow on the profitability. In domestic literature, a contribution in the field of financial stability analysis based on cash-flow is rare, consequently we use cash flow indicators as a liquidity measure. Focus of this paper is on the medium sized enterprises in Serbia being the major sources of environmental pollution. Medium-sized enterprises are the main drivers of economic growth. For improving environmental performance and applying technologies and processes that meet environmental requirements, it is necessary the liquidity and profitability improvement. The progress in the area of environmental protection is the relevant part of the accession process of Serbia to the EU. Idea: The idea of this paper was to empirically examine the liquidity profitability trade-off of selected enterprises. The research was conducted using return on assets as the dependent variable, and three liquidity ratios and three cash flow based indicators as independent variables. Data: The financial analysis is based on the sample of 48 polluting medium-sized enterprises for the period 2010-2015. The official financial statements were taken from the Serbian Business Registers Agency. The data are used on an annual basis. Tools: We tested the panel regression model of profitability with the total number of observations being 288. We estimated the unbalanced panel because our dataset had missing values. It is used the standard pooled OLS estimator. Before estimated panel regression model, we did stationarity and cointegration analysis of sample data. Findings: The results of our study show a significant impact of quick liquidity ratio, cash flow operating margin and cash flow investing margin on profitability measured by return on assets. However, there are no significant effects of current liquidity ratio, operating cash flow liquidity ratio and cash flow financing margin on profitability. The conclusions of our paper refer to the selected enterprises in the observed periods. Contribution: This paper contributes both to the literature concerning liquidity and profitability analysis, since we use cash flow indicators as a liquidity measure.

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Section: Resultssupporting

confidence: 81%

Liquidity profitability trade-off: Evidence from medium enterprises

Stevanović¹,

Minović²,

Ljumović³

2019

Manage: J. Sustainable Bus. Manage, Solutions Emerging Econ.

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“…While the company with lower profitability still need to do an effort to achieve high profit, including tax avoidance (Katz et al, 2013). Company with high profitability will tend to do more conservative and avoid committing questionable practice (Isik & Tasgin, 2017). Questionable practice like tax avoidance might lead to a negative firm value (Zhang et al, 2016).…”

Section: Resultsmentioning

confidence: 99%

Determinants of Indonesian Public Listed Companies to Participate in the Tax Amnesty

Pratama

2018

IJSAM

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This exploratory research paper would investigate several motivations factors that drive the Indonesian public companies to participate in the Tax Amnesty program. The factors were divided into three: Tax Avoidance, Ownership Structures, and Corporate Governance. We also used profitability, size, and age as a control variable. The data collected from public companies listed in Indonesia Stock Exchange. The data will be taken from 2011–2016 companies’ financial statement. There was 135 sample selected using purposive sampling. To analyze the results, we will use binary logistic regressions. The results showed that all the variables mentioned have significant influence toward company's decision to join tax amnesty. The research showed that companies’ decision to participate in Tax Amnesty contribute by many factors, however, in each of the factors, there are different views and perspectives.

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“…For instance, some studies report the relationship between size and profitability to be either positive (e.g. Majumdar, 1997;Serrasqueiro and Nunes, 2008;Stierwald, 2010;Dogan, 2013;Liu at al., 2014;Çelikyurt and Dönmez, 2017;Isik and Tasgin, 2017) or negative (e.g. Goddard et al, 2005;Becker-Blease et al, 2010;Hatem, 2014;Shehata et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

“…According to scholars in industrial economics, business organization and finance, the size is considered to be one of the most essential characteristics of firms in explaining profitability (Majumdar, 1997;Amato and Amato, 2004;Goddard et al, 2005;Serrasqueiro and Nunes, 2008;Lee, 2009;Isik and Tasgin, 2017;among others). However, the question as to whether higher or lower firm size optimizes the firm's profitability continues to be discussed in the theoretical and empirical literature.…”

Section: Introductionmentioning

confidence: 99%

The Effect of Firm Size on Profitability: Evidence From Turkish Manufacturing Sector

Işık¹,

Ünal²,

Ünal³

2017

Pressacademia

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Purpose -This study investigates whether size of 112 publicly listed firms in manufacturing sector affects their profitability in Turkey during the period 2005-2013. Methodology -Dynamic panel data approach (i.e. two-step system GMM estimator) taking into account potential endogeneity of firm-level variables is employed to estimate the effect of alternative firm size indicators on firm profitability. Findings-Estimation results suggest that after controlling for financial risk, liquidity level, growth opportunities, unsystematic risk, firm age, and the other factors, the indicators of firm size measured by firm's assets, sales and number of employees tend to have a positive influence on the profitability of firm measured by operating return on assets. Conclusion-There is enough statistical evidence to support a linear relation between firm size measures and profitability of firms in the period analyzed. However, our empirical results do not support the quadratic or cubic association between size measures and profitability.

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Profitability and Its Determinants in Turkish Manufacturing Industry: Evidence from a Dynamic Panel Model

Cited by 23 publications

References 38 publications

Liquidity profitability trade-off: Evidence from medium enterprises

Liquidity profitability trade-off: Evidence from medium enterprises

Determinants of Indonesian Public Listed Companies to Participate in the Tax Amnesty

The Effect of Firm Size on Profitability: Evidence From Turkish Manufacturing Sector

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