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Determinants of profitability in the EU-15 area

Pierpaolo Pattitoni et al.

Applied Financial Economics2014https://doi.org/10.1080/09603107.2014.904488article
AJG 2ABDC B
Weight
0.73

Abstract

Using data on private firms in the EU-15 area over the period 2004–2011, we investigate the determinants of firm profitability. We extend existing models by considering possible nonlinear effects of typical micro-level determinants as well as the effect of additional micro-level and macro-level variables. Our findings – obtained using a plethora of econometric static and dynamic models – show that nonlinearities help explain the existence of conflicting theories of determinants of profitability (omitting second-order effects may result in inconsistent estimates) and shed light on the role of the firm’s opportunity cost of capital, the majority shareholder commitment level and variables which reflect the economic cycle in explaining firm profitability.

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https://doi.org/https://doi.org/10.1080/09603107.2014.904488

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@article{pierpaolo2014,
  title        = {{Determinants of profitability in the EU-15 area}},
  author       = {Pierpaolo Pattitoni et al.},
  journal      = {Applied Financial Economics},
  year         = {2014},
  doi          = {https://doi.org/https://doi.org/10.1080/09603107.2014.904488},
}

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Evidence weight

0.73

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.97 × 0.4 = 0.39
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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