Firm size and profitability: Key determinants of performance in European wine firms
Ivana Tomas Žiković et al.
What the paper says
Abstract This article examines the determinants of the profitability of European wine companies using dynamic panel models, analyzing 1,025 firms from 14 countries between 2015 and 2021. Unlike previous research that focused mainly on financial variables, this study incorporates financial, nonfinancial, macroeconomic, and institutional factors to provide a broader understanding of profitability drivers. Given significant differences between the individual categories, separate analyses were conducted for small and medium-sized enterprises (SMEs) and large and very large companies (LVL) companies. The results show that higher debt reduces profitability, while a higher ratio of cash flow to operating revenue and firm growth improves profitability. Investment in fixed assets increases the profitability of SMEs, while net asset turnover positively affects both SMEs and LVL firms. Labor productivity significantly influences profitability when SMEs and LVL firms are analyzed separately. Public and private limited companies are more profitable than partnerships or sole traders. Finally, the rule of law positively affects SME profitability.
1 citation
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.16 × 0.4 = 0.06 |
| M · momentum | 0.53 × 0.15 = 0.08 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.