Theodore Papadogonas

Firm‐specific and economy wide determinants of firm profitability: Greek evidence using panel data

Purpose - The purpose of this paper is to examine the determinants of profitability for a sample of Greek non-financial firms listed in the Athens Stock Exchange for the period 1995-2003. This is a very important period for the Greek economy on the way to European monetary union (EMU). Design/methodology/approach - The methodologies employed include panel data estimation techniques. This research attempts to exploit the determinants of firm profitability of non-financial Greek firms listed in Athens Exchange utilizing firm-specific publicly available accounting variables using panel data estimation techniques rather than cross-sectional analysis. Findings - According to the findings, firm profitability was positively affected by size, sales growth and investment and negatively by leverage and current assets. Additionally, we found that the EMU participation and the adoption of the euro were negatively related to firm profitability. Practical implications - Taking into account the fact that the Greek economy has undergone significant transformation during the period under examination on its way to join EMU and to adopt the euro currency, a model has been formulated where both firm-specific and economy wide factors determine firm profitability. Originality/value - This paper focuses on a less developed and efficient stock market. In contrast to previous studies that did not take into account the convergence of the Greek economy to EMU averages and the subsequent adoption of the euro, this paper analyses data for the pre-EMU and the post-EMU periods in an attempt to quantify a potential macroeconomic effect on firm-specific profitability.

Financial factors affecting profitability and employment growth: the case of Greek manufacturing

The key financial determinants of firm profitability and employment growth are identified by using a panel of 3094 Greek manufacturing firms for 1995 and 1999, just before the countrys accession to the European Monetary Union. The analysis includes stepwise regression models. The independent variables used are size, age, location and exports, as well as a number of financial ratios describing the asset structure, capital structure, reliance on debt, employee productivity and managerial efficiency. The results show that size, age, exports, debt structure, investment in fixed assets and profitability of assets and sales contribute significantly to firm growth. Econometric results also reveal that firm size, age, exports, sales growth, reliance on debt on fixed assets and investment growth, as well as efficient management of assets, influence profitability.

Labor productivity growth in Greek manufacturing firms

This paper investigates the determinants of labor productivity growth at the firm level in the Greek manufacturing sector. The analysis is based on descriptive statistics and regression models on a longitudinal sample of 3035 firms. The results show that labor productivity growth is positively related to growth of net fixed assets per employee, export orientation and R&D activity. Firm size, employment growth and industry age affect negatively labor productivity growth.

Financial integration, national savings and national investment in the EU member-states

Financial integration in the EU is reflected in a lower correlation coefficient between national savings and national investment with different implications for “European South” and “European North” member-states.

Determinants of export behavior in the Greek manufacturing sector

This paper examines the determinants of export performance of firms in the Greek manufacturing industry, using cross-sectional data from 1652 firms in 1999 and a Tobit regression model. The study finds that firms that have larger size, lower unit labor cost and low capital to labor ratio have a higher propensity to export, confirming the fact that in Greece, which has the second lowest capital to labor ratio among the EU-15 members, export activities are concentrated among firms with low capital intensity, exactly as the theory of competitive advantage would predict.

‘Stick to the knitting’ vs. ‘the mysteriously potent charm of diversification’: the Greek evidence

This paper provides evidence on the extent, nature of and factors associated with diversification using a novel set of data, referring to both firms and plants, from the Greek manufacturing sector (1992). The paper brings together a strand of hypotheses formulated, and partially tested, in the relevant literature. More specifically, we investigate the relationship between the degree of diversification and firm|industry characteristics by separately examining the behaviour of multiplant and uniplant firms. Certain patterns emerge which are then compared with those that arose in other studies. Copyright