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Industry, firm, year and country effects on profitability in EU food processing

Author

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  • Jan Schiefer

    ()

  • Stefan Hirsch

    ()

  • Monika Hartmann

    ()

  • Adelina Gschwandtner

    ()

Abstract

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.

Suggested Citation

  • 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.
  • Handle: RePEc:ukc:ukcedp:1309
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    Cited by:

    1. Stefan Hirsch & Monika Hartmann, 2014. "Persistence of firm-level profitability in the European dairy processing industry," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 53-63, November.
    2. Giorgio Calcagnini & Annalisa Ferrando & Germana Giombini, 2015. "Multiple market imperfections, firm profitability and investment," European Journal of Law and Economics, Springer, vol. 40(1), pages 95-120, August.

    More about this item

    Keywords

    ROA; decomposition; variance components; MBV; RBV;

    JEL classification:

    • L00 - Industrial Organization - - General - - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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