The Determinants of Enterprise Profi Tability During Reduced Economic Activity

Steinerowska-Streb, Izabella

doi:10.3846/16111699.2011.645864

Cited by 9 publications

(5 citation statements)

References 47 publications

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“…The variable of age is defined as the number of years since the foundation of the firm. The firm size is broadly recognised as an important component of firm profitability (Stierwald, 2009;Steinerowska-Streb, 2012;Ito and Fukao, 2010). As this paper studies exclusively the performance of large firms defined by their employment size (over 250 employees), an additional measure has been added to capture the economic size of firms through the variable of firms' assets (ASSETS).…”

Section: Econometric Analysismentioning

confidence: 99%

Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

Tsiapa

2021

EJMBE

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PurposeThe unprecedented economic crisis in Greece deeply affected entrepreneurship, which was traditionally characterised by low levels of innovation and competitiveness, the dominant presence of micro-sized enterprises and the weak signs of prosperity in large firms. This paper, in acknowledgement of the necessary transformations that production incurred due to the crisis, attempts to detect the characteristics of large manufacturing firms that contributed to their greater resilience during the unstable period of 2011–2016 by analysing the determinants of the higher profitability of firms. The analysis shows that firms that improved their productivity and sales levels and in parallel are flexible, in the sense that they have limited amounts of both assets and liabilities and thus a small risk, are those that presented higher profits during the period under study. Initial conditions, sectoral characteristics and the broader national environment do not seem to have a strong contributive role in firms' profitability.Design/methodology/approachThe analysis follows a dynamic system generalised method of moments (GMM) estimation based on a panel data set of 125 Greek large firms over the time span 2011–2016.FindingsThe analysis shows that firms that improve their productivity and sales levels and in parallel are flexible, in the sense that they have a limited amount of both assets and liabilities and thus a small risk, are those that present higher profits during the period under study. Initial conditions, sectoral characteristics and the broader national environment do not seem to have a strong contributive role in firms' profitability.Research limitations/implicationsThe present paper attempts to explain the performance of the most dynamic large manufacturing firms in Greece by investigating the role of some of the most important determinants of firm profitability (according to data availability), acknowledging, however, some analysis' limitations as the absence of some other parameters like the export activity or the incorporation of any innovative features in the firmsOriginality/valueThe novelty of this paper lies in two points. First, the subject of the analysis is the large firms in Greece, which have not received much attention as Greek entrepreneurship was traditionally based on the light, labour- or resource-intensive production and the main bulk of the literature was not on that topic. Second, during the deep and protracted crisis that Greece has experienced, several production transformations have taken place that remain partly undiscovered. The present paper attempts to analyse the characteristics of large firms that drove their profitability and improved their resilience during the crucial time period 2011–16.

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Section: Econometric Analysismentioning

confidence: 99%

Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

Tsiapa

2021

EJMBE

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“…The most recent global financial crisis, which began with a credit crunch in the U.S. in 2007, influenced Poland in 2009 (Nițescu and Murgu, 2019), when, compared to 2008, national GDP fell by 3.3% (Statystyczny, 2010) and the number of bankruptcies reported by Polish firms increased by 68% (Coface, 2020). Our study began in 2010, when recovery from the crisis became apparent; from that year, the number of businesses reporting bankruptcy decreased, and the profitability of Polish firms improved (Steinerowska-Streb, 2012). The research spanned a 7-year period to consider the potential lagged effects of the crisis and adaptations made by companies in different phases of their business cycle.…”

Section: Methodsmentioning

confidence: 99%

“…Indeed, the economic transformation of the 1990s resulted in the rapid development of entrepreneurship within Polish society, leading to the creation of thousands of small, privately owned firms (Marjański and Sułkowski, 2020). As such, they now have a significant role in national economic growth and in mitigating the impacts of potential crises (Steinerowska-Streb, 2012).…”

Section: Introductionmentioning

confidence: 99%

What do we know about small and medium enterprises’ survival in a post-global economic crisis context?

Steinerowska-Streb

Głód

Steiner

2022

Local Economy: The Journal of the Local Economy Policy Unit

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Considering the impacts of the most recent global economic crisis in 2008/2009, this paper explores how firm size, type of business activity and approach to internationalisation influence SMEs’ survival. Based on the literature in the field, we developed three hypotheses regarding determinants of Small and Medium Enterprises (SME) survival. We tested these hypotheses in a 7-year quantitative study and a survey of 344 SMEs in Poland – the seventh largest market in the European Union. Our findings reveal that, in the context of crisis, internationalisation acts as a stimulus for SMEs and influences their long-term sustainability, with businesses operating in foreign markets being more likely to survive after a global crisis. However, neither business size nor the type of business activity appears to have an impact on SMEs’ survival in a post-global economic crisis environment. Our paper extends knowledge about factors influencing a firm’s post-crisis survival and proposes a new framework for understanding characteristics of SMEs and their propensity to survive in a post-crisis context. In our conclusions, we discuss implications for SME entrepreneurs showing that, in order to enhance chances of survival, even small and medium enterprises should consider expanding business activities beyond their national markets.

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“…La mayoría de las investigaciones utilizan información financiera y contable para explicar el comportamiento de la rentabilidad (Floros y Voulgaris, 2016;Ghosh y Guha, 2015;Steinerowska-Streb, 2012;Wood, 2006). Uno de los ratios más utilizados para analizar la rentabilidad es la razón de liquidez corriente (Ching et al, 2011;Kumaraswamy, 2016;Madhou et al, 2015;Manan, 2010).…”

Section: Marco Teóricounclassified

Factores explicativos de la rentabilidad de las microempresas: Un estudio aplicado al sector comercio

Farías

Rivera-Naranjo

Quimi-Franco

et al. 2021

IRJ

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El presente estudio tiene como objetivo determinar los factores que explican la rentabilidad económica de las microempresas que pertenecen al sector comercio de la provincia del Guayas mediante un modelo de regresión lineal múltiple con datos suministrados por 788 empresas que reportaron sus estados financieros a la Superintendencia de Compañías, Valores y Seguros en el año 2019. Los resultados de estudio mostraron que el endeudamiento, el nivel de liquidez y el tamaño tienen una relación negativa y significativa con la rentabilidad. Este estudio también muestra que la rotación de activos, el capital de trabajo y el impacto de los gastos administrativos tienen una incidencia directa con el rendimiento sobre activo. Esta investigación pone de manifiesto la importancia de la información contable y financiera para explicar el comportamiento de la rentabilidad económica. Las conclusiones de este estudio pretenden ofrecer orientaciones a las empresas sobre las estrategias que deben adoptar para mejorar su rendimiento.

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The Determinants of Enterprise Profi Tability During Reduced Economic Activity

Cited by 9 publications

References 47 publications

Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

Performance of large firms in Greece during the unstable period of 2011–2016: lessons from the weak parts of Europe

What do we know about small and medium enterprises’ survival in a post-global economic crisis context?

Factores explicativos de la rentabilidad de las microempresas: Un estudio aplicado al sector comercio

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