SECTORAL ANALYSIS OF THE DIFFERENCES IN PROFITABILITY OF CZECH AND GERMAN BUSINESS VENTURES - AN EMPIRICAL BENCHMARK STUDY

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F49777513%3A23510%2F18%3A43951070" target="_blank" >RIV/49777513:23510/18:43951070 - isvavai.cz</a>

Result on the web

<a href="http://dx.doi.org/10.15240/tul/001/2018-1-009" target="_blank" >http://dx.doi.org/10.15240/tul/001/2018-1-009</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.15240/tul/001/2018-1-009" target="_blank" >10.15240/tul/001/2018-1-009</a>

Result language

angličtina

Original language name

SECTORAL ANALYSIS OF THE DIFFERENCES IN PROFITABILITY OF CZECH AND GERMAN BUSINESS VENTURES - AN EMPIRICAL BENCHMARK STUDY

Original language description

Profitability measures are a lens through which business can be viewed and they form a common basis for investment decisions. Especially in areas close to national borders, these decisions could be linked to the question on which side of the border a venture should be located in order to realise country-specific comparative advantages that make the investment more profitable. Differences in profitability between countries are driven by manifold aspects, including specific cost or revenue structures, financing patterns and conditions, as well as taxation. The aim of this study is to identify the driving factors behind differences in profitability of Czech and German firms on the basis of a comparative analysis. In this article, a two-step variance analysis is conducted. The first step focuses on the operational differences in RoA between Czech and German ventures, which is based on deeper analyses of the asset turnover and the profit margin. In the second step, the differences in RoE are analysed, considering influences from national taxation, conditions and patterns of financing and operations of the ventures. A model-based cumulative variance analysis quantifies the impacts of these underlying drivers of profitability with a comparative focus. For this reason, the average measures of these drivers from 2002 to 2014 - the longest time series available for both countries - are extracted from the BACH database, which provides harmonised accounting information. This paper confirms the hypothesis that specific drivers of profitability differ significantly between the two countries in certain business sectors and would cause substantial differences in profitability. Due to the overlapping nature of these individual effects, they compensate each other to a great extent. The results provide useful benchmarks that a company&apos;s management can use to increase its profitability tackling specific comparative (dis-)advantages between the Czech Republic and Germany.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

E+M Ekonomie a management

ISSN

1212-3609

e-ISSN

—

Volume of the periodical

21

Issue of the periodical within the volume

1

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

17

Pages from-to

127-143

UT code for WoS article

000429786100009

EID of the result in the Scopus database

2-s2.0-85045040331