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Firms' profitability from firm-specific factor, environmental turbulence, and macroeconomic: evidence from Taiwan's food industry - A review

Author

Listed:
  • Joe-Ming Lee

    (Department of Applied Economics, Fo Guang University, Jiaosi Shiang, Taiwan)

  • Shiu-Wan Hung

    (Department of Business Administration, National Central University, Jung-li City, Taoyuan, Taiwan)

  • Chiao-Ming Li

    (Department of Business Administration, National Central University, Jung-li City, Taoyuan, Taiwan)

Abstract

After a series of shocking domestic food safety scandals in the past few years, environmental concerns have risen in the eyes of the public. The aim of this paper is to analyse the relationships among firm performance, customer capital, R&D innovation, structural capital, firm asset, environmental turbulence, and the macroeconomy by using the panel data model on Taiwanese food industry firms during 2010-2016 and by examining the results of the multiple regime panel smooth transition regression (MR-PSTR) model. The findings show that environmental turbulence and the misery index have a negative relationship on firms' performance, while there is a positive relationship between customer capital and firm performance. However, under high environmental turbulence, customer capital and firm performance are negatively related, meaning that a firm's marketing promotion will be ineffective. This study recommends that the food industry establish a high degree of trust from society and consumers. It is also important for the food industry to establishes a positive attitude towards quality requirements.

Suggested Citation

  • Joe-Ming Lee & Shiu-Wan Hung & Chiao-Ming Li, 2019. "Firms' profitability from firm-specific factor, environmental turbulence, and macroeconomic: evidence from Taiwan's food industry - A review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(2), pages 93-101.
    • Handle: RePEc:caa:jnlage:v:65:y:2019:i:2:id:134-2018-agricecon
    DOI: 10.17221/134/2018-AGRICECON
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