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Panel data investigation of determinants of profitability: evidence from Indian corporate sector

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  • Rakshika Gupta
  • Supran Kumar Sharma
  • Jyoti Sharma

Abstract

The study uncovers the role of factors like size, liquidity, tangibility, firm age, asset turnover, capital structure, technical efficiency and its components on the level of profitability of the selected firms listed in S%P Index of Bombay Stock Exchange of India. The return on equity (ROE) and return on assets (ROA) have been employed as proxies of profitability. Quantitative research methods including panel regression models of random and fixed effects as well as data envelopment analysis based technical efficiency have been estimated to reveal the impact of aforementioned factors onprofitability of selected firms. The study recommends that tangibility, asset turnover, firm size, firm age and capital structure are significant on statistical ground for ROA whereas in case of ROE, capital structure, firm size, asset turnover and firm age are established as critically significant factors. The results also highlight that higher scale technical efficiency may ends in poorer profitability.

Suggested Citation

  • Rakshika Gupta & Supran Kumar Sharma & Jyoti Sharma, 2025. "Panel data investigation of determinants of profitability: evidence from Indian corporate sector," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 37(3), pages 287-307.
    • Handle: RePEc:ids:ijbire:v:37:y:2025:i:3:p:287-307
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