Industry, firm, year and country effects on profitability in EU food processing
We decompose the variance of food industry return-on-assets into industry, firm, year and country effects. After determining significance in a nested ANOVA, we estimate the magnitude using components of variance in a large sample of corporations. As a robustness check, we estimate a multilevel model that additionally allows us to estimate the impact of several covariates at each level. The results show that firm characteristics are more important than industry structure in determining food industry profitability. In particular, firm size seems to be an important driver of profitability while firm risk, age and, surprisingly market share have a negative influence.
|Date of creation:||May 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0)1227 827497
Web page: http://www.kent.ac.uk/economics/
|Order Information:|| Email: |
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.:
- 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.
- 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.
- Adelina Gschwandtner, 2005.
"Profit persistence in the 'very' long run: evidence from survivors and exiters,"
Taylor & Francis Journals, vol. 37(7), pages 793-806.
- Adelina Gschwandtner, 2004. "Profit Persistence in the "Very" Long Run: Evidence from Survivors and Exiters," Vienna Economics Papers 0401, University of Vienna, Department of Economics.
- S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
- Artis, Michael J & Krolzig, Hans-Martin & Toro, Juan, 1999.
"The European Business Cycle,"
CEPR Discussion Papers
2242, C.E.P.R. Discussion Papers.
- 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, M. & Krolzig, H.-M. & Toro, J., 1999. "The European Business Cycle," Economics Working Papers eco99/24, European University Institute.
- 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.
- Waring, Geoffrey F, 1996. "Industry Differences in the Persistence of Firm-Specific Returns," American Economic Review, American Economic Association, vol. 86(5), pages 1253-65, December.
- Schmalensee, Richard., 1984.
"Do markets differ much?,"
1531-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Tremblay, Victor J, 1985. "Strategic Groups and the Demand for Beer," Journal of Industrial Economics, Wiley Blackwell, vol. 34(2), pages 183-98, December.
- Loderer, Claudio & Waelchli, Urs, 2010. "Firm age and performance," MPRA Paper 26450, University Library of Munich, Germany.
- Slade, Margaret E, 1987. "Interfirm Rivalry in a Repeated Game: An Empirical Test of Tacit Collusion," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 499-516, June.
- Richard J. Sexton, 2000. "Industrialization and Consolidation in the U.S. Food Sector: Implications for Competition and Welfare," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1087-1104.
- Geroski, Paul A & Jacquemin, Alexis, 1988. "The Persistence of Profits: A European Comparison," Economic Journal, Royal Economic Society, vol. 98(391), pages 375-89, June.
- Dorsey, Sarah & Boland, Michael A., 2009. "The Impact of Integration Strategies on Food Business Firm Value," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(03), December.
- Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057 Elsevier.
- B. Burcin Yurtoglu, 2004. "Persistence of firm-level profitability in Turkey," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 615-625.
- Valerie Y. Suslow, 1986. "Estimating Monopoly Behavior with Competitive Recycling: An Application to Alcoa," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 389-403, Autumn.
- Catherine D. Wolfram, 1999. "Measuring Duopoly Power in the British Electricity Spot Market," American Economic Review, American Economic Association, vol. 89(4), pages 805-826, September.
- Karp, Larry S & Perloff, Jeffrey M, 1989. "Dynamic Oligopoly in the Rice Export Market," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 462-70, August.
- 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.
- 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.
- Porter, Robert H, 1985. "On the Incidence and Duration of Price Wars," Journal of Industrial Economics, Wiley Blackwell, vol. 33(4), pages 415-26, June.
- repec:cup:cbooks:9780521306935 is not listed on IDEAS
- Chen, Yi-Min, 2010. "The continuing debate on firm performance: A multilevel approach to the IT sectors of Taiwan and South Korea," Journal of Business Research, Elsevier, vol. 63(5), pages 471-478, May.
- Aviv Nevo & Catherine Wolfram, 2002. "Why Do Manufacturers Issue Coupons? An Empirical Analysis of Breakfast Cereals," RAND Journal of Economics, The RAND Corporation, vol. 33(2), pages 319-339, Summer.
- Goddard, J. A. & Wilson, J. O. S., 1999. "The persistence of profit: a new empirical interpretation," International Journal of Industrial Organization, Elsevier, vol. 17(5), pages 663-687, July.
- Teece, David J, 1981. "Internal Organization and Economic Performance: An Empirical Analysis of the Profitability of Principal Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 30(2), pages 173-99, December.
- Todd E. Clark & Eric van Wincoop, 1999.
"Borders and business cycles,"
91, Federal Reserve Bank of New York.
- Gabriel Hawawini & Venkat Subramanian & Paul Verdin, 2003. "Is performance driven by industry or firm-specific factors? A new look at the evidence," ULB Institutional Repository 2013/14188, ULB -- Universite Libre de Bruxelles.
- John Goddard & Manouche Tavakoli & John Wilson, 2005. "Determinants of profitability in European manufacturing and services: evidence from a dynamic panel model," Applied Financial Economics, Taylor & Francis Journals, vol. 15(18), pages 1269-1282.
- Mueller, Dennis C, 1977. "The Persistence of Profits above the Norm," Economica, London School of Economics and Political Science, vol. 44(176), pages 369-80, November.
- 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.
- Bresnahan, Timothy F., 1981. "Departures from marginal-cost pricing in the American automobile industry : Estimates for 1977-1978," Journal of Econometrics, Elsevier, vol. 17(2), pages 201-227, November.
- Cotterill, Ronald W, 1986. "Market Power in the Retail Food Industry: Evidence from Vermont," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 379-86, August.
- 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.
- Caves, R E & Porter, M E, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, MIT Press, vol. 91(2), pages 241-61, May.
- Christoph R. Weiss & Antje Wittkopp, 2005. "Retailer concentration and product innovation in food manufacturing," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(2), pages 219-244, June.
- André Sapir & Marco Buti, 1998. "Economic policy in EMU," ULB Institutional Repository 2013/8078, ULB -- Universite Libre de Bruxelles.
When requesting a correction, please mention this item's handle: RePEc:ukc:ukcedp:1309. 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: (Tracey Girling)
If references are entirely missing, you can add them using this form.