IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v95y2024i1p85-111.html
   My bibliography  Save this article

What are the determinants affecting cooperatives’ profitability? Evidence from Spain

Author

Listed:
  • Mercè Sala‐Ríos

Abstract

This study focuses on the analysis of the determinants of Spanish cooperatives’ profitability. We inspect several variables, whose influence on firms’ profitability has been verified by prior literature, and we assess whether these results are confirmed in cooperatives. The data span 13 years (2008–20). We approach the analysis including: (i) firm‐specific factors, (ii) industry‐specific factors, and (iii) location factors. There is a main research question: Are there significant differences in cooperatives’ profitability depending on firm‐specific, industry‐specific and/or location factors? The results emphasize that firm‐specific effects are the most important for cooperatives’ profitability. Summarizing our findings, cooperatives’ profitability is positively affected by size, liquidity, indebtedness, regional specialization in cooperatives, location economies, and lagging profitability, and negatively affected by age and presence in international markets.

Suggested Citation

  • Mercè Sala‐Ríos, 2024. "What are the determinants affecting cooperatives’ profitability? Evidence from Spain," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(1), pages 85-111, March.
    • Handle: RePEc:bla:annpce:v:95:y:2024:i:1:p:85-111
    DOI: 10.1111/apce.12423
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/apce.12423
    Download Restriction: no
    File URL: https://libkey.io/10.1111/apce.12423?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ali Saleh Alarussi & Sami Mohammed Alhaderi, 2018. "Factors affecting profitability in Malaysia," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 45(3), pages 442-458, August.
    2. Adelina Gschwandtner & Stefan Hirsch, 2018. "What Drives Firm Profitability? A Comparison of the US and EU Food Processing Industry," Manchester School, University of Manchester, vol. 86(3), pages 390-416, June.
    3. Joachim Wagner, 2016. "Exports, Imports and Profitability: First Evidence for Manufacturing Enterprises," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 9, pages 311-338, World Scientific Publishing Co. Pte. Ltd..
    4. Pablo Muñoz & Jonathan Kimmitt & Dimo Dimov, 2020. "Packs, Troops and Herds: Prosocial Cooperatives and Innovation in the New Normal," Journal of Management Studies, Wiley Blackwell, vol. 57(3), pages 470-504, May.
    5. Amélia Branco & João Carlos Lopes, 2018. "Cluster and business performance: Historical evidence from the Portuguese cork industry," Investigaciones de Historia Económica - Economic History Research (IHE-EHR), Journal of the Spanish Economic History Association, Asociación Española de Historia Económica, vol. 14(01), pages 43-53.
    6. Joe S. Bain, 1951. "Relation of Profit Rate to Industry Concentration: American Manufacturing, 1936–1940," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 65(3), pages 293-324.
    7. Ilhan Dalci, 2018. "Impact of financial leverage on profitability of listed manufacturing firms in China," Pacific Accounting Review, Emerald Group Publishing Limited, vol. 30(4), pages 410-432, November.
    8. Marcel van den Berg & Charles van Marrewijk & Saara Tamminen, 2018. "Trade, productivity and profitability: On profit levels and profit margins," The World Economy, Wiley Blackwell, vol. 41(8), pages 2149-2174, August.
    9. William Ruland & Ping Zhou, 2005. "Debt, Diversification, and Valuation," Review of Quantitative Finance and Accounting, Springer, vol. 25(3), pages 277-291, November.
    10. Cecília Hornok & Balázs Muraközy, 2019. "Markups of Exporters and Importers: Evidence from Hungary," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(3), pages 1303-1333, July.
    11. Joachim Wagner, 2014. "Exports and firm profitability: Quality matters!," Economics Bulletin, AccessEcon, vol. 34(3), pages 1644-1652.
    12. Schmalensee, Richard, 1985. "Do Markets Differ Much?," American Economic Review, American Economic Association, vol. 75(3), pages 341-351, June.
    13. Myers, Stewart C. & Majluf, Nicholas S., 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Journal of Financial Economics, Elsevier, vol. 13(2), pages 187-221, June.
    14. Anita M. McGahan & Michael E. Porter, 2002. "What Do We Know About Variance in Accounting Profitability?," Management Science, INFORMS, vol. 48(7), pages 834-851, July.
    15. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    16. A. Panno, 2003. "An empirical investigation on the determinants of capital structure: the UK and Italian experience," Applied Financial Economics, Taylor & Francis Journals, vol. 13(2), pages 97-112.
    17. Ignacio Bretos & Anjel Errasti & Carmen Marcuello, 2020. "Is there life after degeneration? The organizational life cycle of cooperatives under a ‘grow‐or‐die’ dichotomy," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(3), pages 435-458, September.
    18. Myers, Stewart C, 1984. "The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-592, July.
    19. Goddard, John & Tavakoli, Manouche & Wilson, John O.S., 2009. "Sources of variation in firm profitability and growth," Journal of Business Research, Elsevier, vol. 62(4), pages 495-508, April.
    20. ANITA M. McGAHAN & MICHAEL E. PORTER, 1997. "How Much Does Industry Matter, Really?," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 15-30, July.
    21. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    22. M. Adams & M. Buckle, 2003. "The determinants of corporate financial performance in the Bermuda insurance market," Applied Financial Economics, Taylor & Francis Journals, vol. 13(2), pages 133-143.
    23. Mill�n D�az-Foncea & Carmen Marcuello, 2014. "The Relation between Total Employment and Cooperative Employment: A Convergence and Causality Analysis," Spatial Economic Analysis, Taylor & Francis Journals, vol. 9(1), pages 71-92, March.
    24. Jan Keil, 2017. "Explaining the Concentration-Profitability Paradox," Review of Political Economy, Taylor & Francis Journals, vol. 29(2), pages 209-231, April.
    25. Richard P. Rumelt, 1991. "How much does industry matter?," Strategic Management Journal, Wiley Blackwell, vol. 12(3), pages 167-185, March.
    26. Fatmir Mehmeti & Pleurat Mustafa, 2015. "The Role of Finance on Achieving Companies Goals," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 1, ejes_v1_i.
    27. Eissa A. Al‐Homaidi & Mosab I. Tabash & Najib H. Farhan & Faozi A. Almaqtari, 2019. "The determinants of liquidity of Indian listed commercial banks: A panel data approach," Cogent Economics & Finance, Taylor & Francis Journals, vol. 7(1), pages 1616521-161, January.
    28. Love, James H. & Máñez, Juan A., 2019. "Persistence in exporting: Cumulative and punctuated learning effects," International Business Review, Elsevier, vol. 28(1), pages 74-89.
    29. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    30. Łukasz Kryszak & Marta Guth & Bazyli Czyżewski, 2021. "Determinants of farm profitability in the EU regions. Does farm size matter?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(3), pages 90-100.
    31. Maja Pervan & Ivica Pervan & Marijana Ćurak, 2019. "Determinants of firm profitability in the Croatian manufacturing industry: evidence from dynamic panel analysis," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 968-981, January.
    32. Dow, Gregory K, 1993. "Why Capital Hires Labor: A Bargaining Perspective," American Economic Review, American Economic Association, vol. 83(1), pages 118-134, March.
    33. Joshua Abor, 2005. "The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 6(5), pages 438-445, December.
    34. Joachim Wagner, 2016. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 2, pages 43-87, World Scientific Publishing Co. Pte. Ltd..
    35. Takeo Nakao, 1980. "Demand Growth, Profitability, and Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 397-411.
    36. Mira Dimitrić & Ivana Tomas Žiković & Andrea Arbula Blecich, 2019. "Profitability determinants of hotel companies in selected Mediterranean countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 1977-1993, January.
    37. Faozi A. Almaqtari & Eissa A. Al‐Homaidi & Mosab I. Tabash & Najib H. Farhan, 2019. "The determinants of profitability of Indian commercial banks: A panel data approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 168-185, January.
    38. Swagatika Nanda & Ajaya Kumar Panda, 2018. "The determinants of corporate profitability: an investigation of Indian manufacturing firms," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 13(1), pages 66-86, January.
    39. Millán Díaz-Foncea & Carmen Marcuello, 2015. "Spatial patterns in new firm formation: are cooperatives different?," Small Business Economics, Springer, vol. 44(1), pages 171-187, January.
    40. Darush Yazdanfar, 2013. "Profitability determinants among micro firms: evidence from Swedish data," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 9(2), pages 151-160, March.
    41. Vicky Bamiatzi & Graham Hall, 2009. "Firm versus Sector Effects on Profitability and Growth: The Importance of Size and Interaction," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 16(2), pages 205-220.
    42. Porter, Michael E, 1979. "The Structure within Industries and Companies' Performance," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 214-227, May.
    43. repec:eme:mfppss:v:35:y:2009:i:11:p:930-939 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kohls, Tobias & Mager, Ferdinand & Regele, Tobias, 2023. "Competitive advantage and firm, industry, and country effects: An asset pricing perspective," Journal of Economics and Business, Elsevier, vol. 127(C).
    2. Stefan Hirsch & Jan Schiefer, 2016. "What Causes Firm Profitability Variation in the EU Food Industry? A Redux of Classical Approaches of Variance Decomposition," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 79-92, January.
    3. Vicente López-López & Susana Iglesias-Antelo & Esteban Fernández, 2020. "Is Sustainable Performance Explained by Firm Effect in Small Business?," Sustainability, MDPI, vol. 12(23), pages 1-13, December.
    4. Fernando José Zambrano Farías & María del Carmen Valls Martínez & Pedro Antonio Martín-Cervantes, 2022. "Profitability determinants of the natural stone industry: Evidence from Spain and Italy," PLOS ONE, Public Library of Science, vol. 17(12), pages 1-23, December.
    5. Luiz Claudio Louzada & Márcio Augusto Gonçalves, 2018. "The Moderating Effect of the Sector’s Level of Concentration on the Relationship Between Balance Sheet Composition and the Firm’s Competitive Advantage," Brazilian Business Review, Fucape Business School, vol. 15(6), pages 512-532, November.
    6. Andrews, Daniel S. & Fainshmidt, Stav & Cuervo-Cazurra, Alvaro, 2025. "The home country effect on between- and within-firm performance differences," Journal of World Business, Elsevier, vol. 60(1).
    7. Meghana Ayyagari & Asli Demirgüc-Kunt & Vojislav Maksimovic, 2008. "How Well Do Institutional Theories Explain Firms' Perceptions of Property Rights?," The Review of Financial Studies, Society for Financial Studies, vol. 21(4), pages 1833-1871, July.
    8. Carlo MIGLIARDO & Daniele SCHILIRÒ, 2016. "Mid Sized Italian Manufacturing Firms A Panel Data Analysis on Profitability," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 7(2), pages 129-145.
    9. Jan Schiefer & Stefan Hirsch & Monika Hartmann & Adelina Gschwandtner, 2013. "Industry, firm, year and country effects on profitability in EU food processing," Studies in Economics 1309, School of Economics, University of Kent.
    10. J. Vineesh Prakash & D. K. Nauriyal, 2020. "Automotive Components Industry and Profitability Factors: Evidence from India," Vision, , vol. 25(2), pages 209-223, June.
    11. Weiß, Christian, 2010. "The Ownership Concentration of Firms: Three Essays on the Determinants and Effects," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 30247.
    12. André Ribeiro Gonçalves & Rogério H Quintella, 2006. "The role of internal and external factors in the performance of brazilian companies and its evolution between 1990 and 2003," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 10(spe), pages 117-136.
    13. Spyridon Stavropoulos & Martijn J. Burger & Dimitris Skuras, 2015. "Data Sparseness and Variance in Accounting Profitability," Tinbergen Institute Discussion Papers 15-014/VII, Tinbergen Institute.
    14. Bart S. Vanneste, 2017. "How Much Do Industry, Corporation, and Business Matter, Really? A Meta-Analysis," Strategy Science, INFORMS, vol. 2(2), pages 121-139, June.
    15. Schiefer, Jan & Hartmann, Monika, 2013. "Industry, firm, year, and country effects on profitability in EU food processing," Discussion Papers 162878, University of Bonn, Institute for Food and Resource Economics.
    16. Markus Fitza & Laszlo Tihanyi, 2017. "How Much Does Ownership Form Matter?," Strategic Management Journal, Wiley Blackwell, vol. 38(13), pages 2726-2743, December.
    17. Changhyun Kim & Richard A. Bettis, 2014. "Cash is surprisingly valuable as a strategic asset," Strategic Management Journal, Wiley Blackwell, vol. 35(13), pages 2053-2063, December.
    18. Eriksen, Bo & Knudsen, Thorbjorn, 2003. "Industry and firm level interaction: Implications for profitability," Journal of Business Research, Elsevier, vol. 56(3), pages 191-199, March.
    19. Zaheda Daruwala, 2023. "Influence of Financial Leverage on Corporate Profitability: Does it Really Matter?," International Journal of Economics and Financial Issues, Econjournals, vol. 13(4), pages 37-46, July.
    20. Dmitry Sharapov & Paul Kattuman & Diego Rodriguez & F. Javier Velazquez, 2021. "Using the SHAPLEY value approach to variance decomposition in strategy research: Diversification, internationalization, and corporate group effects on affiliate profitability," Strategic Management Journal, Wiley Blackwell, vol. 42(3), pages 608-623, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:annpce:v:95:y:2024:i:1:p:85-111. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.