Industry, firm, year, and country effects on profitability: Evidence from a large sample of EU food processing firms
This paper analyzes the variance in accounting profitability within the European food industry. Based on a large panel data set, the variance in return on assets (ROA) is decomposed into year, country, industry, and firm effects. Further on, we include all possible interactions between year, country, and industry and discuss the theoretical foundations for these effects. After singling out the significant effect classes in a nested ANOVA with a thoroughly designed rotation regarding the order of effect introduction, we determine effect magnitude using components of variance (COV). Our results show that firm characteristics seem to be far more important than industry structure in determining the level of economic return within the food industry. Year and country effects, as well as their interactions were weak or insignificant, indicating that macroeconomics and trade theory offer little potential to serve as a basis for the explanation of performance differentials. While neither national nor industry-specific cycles were significant, EU-wide fluctuations significantly contributed to explaining differences in performance, suggesting that economic cycles in the EU are by and large synchronized.
|Date of creation:||2009|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hawawini, Gabriel & Subramanian, Venkat & Verdin, Paul, 2004.
"The home country in the age of globalization: how much does it matter for firm performance?,"
Journal of World Business,
Elsevier, vol. 39(2), pages 121-135, May.
- Gabriel Hawawini & Venkat Subramanian & Paul Verdin, 2004. "The home country in the age of globalization: how much does it matter for firm performance?," ULB Institutional Repository 2013/14190, ULB -- Universite Libre de Bruxelles.
- Mike Artis & Hans-Martin Krolzig & Juan Toro, 2004.
"The European business cycle,"
Oxford Economic Papers,
Oxford University Press, vol. 56(1), pages 1-44, January.
- Artis, M. & Krolzig, H.-M. & Toro, J., 1999. "The European Business Cycle," Economics Working Papers eco99/24, European University Institute.
- Mike Artis & Hans-Martin Krolzig & Juan Toro, 2002. "The European Business Cycle," Economic Working Papers at Centro de Estudios Andaluces E2002/19, Centro de Estudios Andaluces.
- Artis, Michael J & Krolzig, Hans-Martin & Toro, Juan, 1999. "The European Business Cycle," CEPR Discussion Papers 2242, C.E.P.R. Discussion Papers.
- Todd E. Clark & Eric Van Wincoop, 1999.
"Borders and business cycles,"
91, Federal Reserve Bank of New York.
- André Sapir & Marco Buti, 1998. "Economic policy in EMU," ULB Institutional Repository 2013/8078, ULB -- Universite Libre de Bruxelles.
- Sara Schumacher & Michael Boland, 2005. "The effects of industry and firm resources on profitability in the food economy," Agribusiness, John Wiley & Sons, Ltd., vol. 21(1), pages 97-108.
- Ramos, Raul & Clar, Miquel & Surinach, Jordi, 2003. "National versus sectoral shocks: new evidence for the manufacturing sector in European countries," Economics Letters, Elsevier, vol. 78(2), pages 241-245, February.
- Andrzej Szymanski & Matthew Gorton & Lionel Hubbard, 2007. "A Comparative Analysis of Firm Performance in Post-socialist Economies: Evidence from the Polish Food Processing Industry," Post-Communist Economies, Taylor & Francis Journals, vol. 19(4), pages 433-448.
- Schmalensee, Richard., 1984.
"Do markets differ much?,"
1531-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea09:49322. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.