IDEAS home Printed from https://ideas.repec.org/p/iae/iaewps/wp2010n03.html
   My bibliography  Save this paper

Determinants of Profitability: An Analysis of Large Australian Firms

Author

Listed:
  • Andreas Stierwald

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

This paper identifies the determinants of firm profitability and quantifies their relative importance. Using a panel of large Australian firms for the period 1995 to 2005, the analysis estimates a dynamic profit model that, unlike most existing research, directly includes measures of productivity and productivity persistence. Descriptive statistics illustrate that the sample is characterized by a large amount of profit heterogeneity, and that substantial differences exist between industries and across firms. Estimation results indicate that firm profitability is predominantly determined by firm-level characteristics, and that sector effects are relevant, but to a much smaller extent. The analysis also reveals that, among firm effects, productivity and productivity persistence enhance profitability.

Suggested Citation

  • Andreas Stierwald, 2010. "Determinants of Profitability: An Analysis of Large Australian Firms," Melbourne Institute Working Paper Series wp2010n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  • Handle: RePEc:iae:iaewps:wp2010n03
    as

    Download full text from publisher

    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2010n03.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Milos Laura Raisa & Milos Marius Cristian, 2015. "Does Short Term Debt Affect Profitability? Evidence From The Romanian Listed Companies," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 228-233, December.
    2. repec:kap:jrefec:v:56:y:2018:i:3:d:10.1007_s11146-017-9613-4 is not listed on IDEAS
    3. Ijaz Hussain, 2012. "The Consequences of Easy Credit Policy, High Gearing, and Firms’ Profitability in Pakistan’s Textile Sector: A Panel Data Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(1), pages 33-44, Jan-June.

    More about this item

    Keywords

    Firm Performance; Determinants of Profit; Dynamic Panel Bias; Total Factor Productivity;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iae:iaewps:wp2010n03. 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: (Sheri Carnegie). General contact details of provider: http://edirc.repec.org/data/mimelau.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.