Market Concentration and Firm Performance of Manufacturing Companies

Feny Ilmiah Wulandari and Yuli Soesetio ()
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Feny Ilmiah Wulandari: Universitas Negeri Malang
Yuli Soesetio: Universitas Negeri Malang

A chapter in Proceedings of the 4th Business Innovation Sustainability and Technology International Conference (BISTIC 2024), 2024, pp 23-31 from Springer

Abstract: Abstract This research aims to analyze the impact of market concentration, financial risk, return on assets, debt policy, and company size on the performance of companies in the manufacturing industry. The study covered all manufacturing sector companies over an 11-year period from 2009 to 2020, encompassing a total of 195 companies that met the specified criteria. Using multiple regression analysis, the research shows that market concentration, measured by the Herfindahl-Hirschman Index, and other company-specific factors consistently influence profitability. However, the study yielded surprising results regarding company size, which was found to have a significant negative effect on performance. This negative impact is attributed to the increase in operational and administrative costs as the number and size of assets under management grow, ultimately leading to a decrease in company profits.

Keywords: Profitability; Market Concentration; Financial Performance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-576-8_4

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DOI: 10.2991/978-94-6463-576-8_4

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