WHEN - WHERE - HOW? – THE IMPACT OF EXTERNAL FACTORS ON THE PROFITABILITY OF FOOD INDUSTRY COMPANIES

Földi, Péter – Bareith, Tibor – Parádi-Dolgos, Anett

Keywords: food industry, profitability, linear model, subsidies, competitors JEL: Q10, Q13, Q14

The ability of food businesses to generate profits is also affected by numerous external factors. However, measuring the impact of external factors on profitability leads to complex methodological issues. In the present study, we investigate the profitability of food manufacturing firms and the impact of the support and competitive environment on it using a linear model. Our aim is to identify the impact of firm, industry and regional (county) time factors by tracking ROA and ROE ratios between 2011 and 2021.
Our results strongly support the dominance of firm effects in both Hungarian food and beverage industries, as these effects account for 27.95% of the variance of firm profitability. Activity, year, and county effects contributed to the variance of ROA by 25.57%, 25.52% and 20.96%, respectively.
Regardless of the methodology used, the dominance of the firm effects and the relatively weaker presence of the years and counties effect in our analysis confirm previous international academic findings.
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