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

Jan Schiefer (), Stefan Hirsch (), Monika Hartmann () and Adelina Gschwandtner

Studies in Economics from School of Economics, University of Kent

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.

Keywords: ROA; decomposition; variance components; MBV; RBV (search for similar items in EconPapers)
JEL-codes: C22 L00 L66 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-agr and nep-eff
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Citations: View citations in EconPapers (3)

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