Financial performance of hidden champions: Evidence from German manufacturing firms

Matthias S. Johann (), Joern Block and Lena Benz ()
Additional contact information
Matthias S. Johann: University of Trier
Lena Benz: University of Trier

Small Business Economics, 2022, vol. 59, issue 3, No 6, 873-892

Abstract: Abstract Hidden champions are market leaders in niche markets and are an important part of the German Mittelstand. Although the hidden champion phenomenon has received considerable interest in practice, few academic studies on this issue exist. We especially lack evidence on the financial performance of hidden champions. Our study addresses this gap and investigates the profitability of hidden champions. In analyzing a panel dataset of 4677 German manufacturing firms, of which 617 are hidden champions, we find that hidden champions have significantly higher profitability with regard to return on assets but less so regarding return on equity. The hidden champion performance effect on return on assets is valued at 1.7 percentage points. Furthermore, the hidden champion performance effect decreases with firm size. Our paper contributes to the literature on the effect of firm strategy on firm profitability and adds to a better understanding of the hidden champion phenomenon.

Keywords: Hidden champions; Niche market leadership; Mittelstand; Manufacturing; Financial performance; Profitability; L25; L26 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11187-021-00557-7 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:59:y:2022:i:3:d:10.1007_s11187-021-00557-7

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/11187/PS2

DOI: 10.1007/s11187-021-00557-7

Access Statistics for this article

Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch

More articles in Small Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().