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Dynamics of Firm Profitability and Growth: Do Knowledge-Intensive (Business) Services Persistently Outperform?

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  • Ioannis Giotopoulos

Abstract

This paper explores the persistence of profitability and growth for firms operating in the Greek service sector, paying special attention to knowledge-intensive services (KIS) and knowledge-intensive business services (KIBS). The generalized method of moments is used on a rich panel of firms over a recent nine-year period. Quantile regressions are complementarily applied for KIS and KIBS industries. The key results from both growth and profit dynamics suggest that firms in KIS and KIBS industries persistently outperform firms in less knowledge-intensive service industries, pointing to strategic advantages of the former. Importantly, KIS and KIBS seem to be able to sustain their growth and profitability persistent trends even in times of crisis. Further insight into these issues is provided by the quantile analysis, the exploration of the profitability and growth inter-linkages, and the investigation of differences among various size groups in KIS and KIBS.

Suggested Citation

  • Ioannis Giotopoulos, 2014. "Dynamics of Firm Profitability and Growth: Do Knowledge-Intensive (Business) Services Persistently Outperform?," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 21(3), pages 291-319, November.
    • Handle: RePEc:taf:ijecbs:v:21:y:2014:i:3:p:291-319
    DOI: 10.1080/13571516.2014.921364
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    References listed on IDEAS

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    1. Sophia Dimelis & Ioannis Giotopoulos & Helen Louri, 2013. "The credit crunch and firm growth in the euro area: 2005-2011. A quantile panel analysis," Working Papers 165, Bank of Greece.
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    Cited by:

    1. Robin Valenta & Johannes Idsø & Leiv Opstad, 2021. "Evidence of a Threshold Size for Norwegian Campsites and Its Dynamic Growth Process Implications—Does Gibrat’s Law Hold?," Economies, MDPI, vol. 9(4), pages 1-14, November.
    2. Leiv Opstad & Johannes Idsø & Robin Valenta, 2022. "The Dynamics of the Profitability and Growth of Restaurants; The Case of Norway," Economies, MDPI, vol. 10(2), pages 1-12, February.
    3. Constantina Backinezos & Stelios Panagiotou & Athina Rentifi, 2019. "Greek export performance: a constant market share analysis," Economic Bulletin, Bank of Greece, issue 50, pages 45-65, December.
    4. Nikos Vettas & Evangelia Velavanioti & Konstantinos Peppas & Michail Vasileiadis, 2019. "The evolution of new firm's characteristics in Greece before and during the economic adjustment programmes," Economic Bulletin, Bank of Greece, issue 50, pages 67-109, December.
    5. Leiv Opstad & Johannes Idso & Robin Valenta, 2021. "The Degree of Profit Persistence in the Tourism Industry: The Case of Norwegian Campsites," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 140-155.
    6. Stefan Hirsch, 2018. "Successful In The Long Run: A Meta†Regression Analysis Of Persistent Firm Profits," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 23-49, February.
    7. Heather D. Gibson & Georgia Pavlou & Christina Tsochatzi & Melina Vasardani, 2019. "Greece's integration into global value chains," Economic Bulletin, Bank of Greece, issue 50, pages 7-44, December.
    8. Cheng-Tsung Lu & Yeun-Wen Chang, 2016. "A Study on the Relationship between the Typology of Knowledge-Intensive Businesses (KIBs) and Performance Measurement Systems (PMS): Evidence from Taiwan," Accounting and Finance Research, Sciedu Press, vol. 5(4), pages 1-89, November.
    9. Faidon Kalfaoglou, 2019. "Cryptoassets: potential implications for financial stability," Economic Bulletin, Bank of Greece, issue 50, pages 111-134, December.

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