Investigating the differences in entrepreneurial success through the firm-specific factors: Microeconomic evidence from the Czech food industry

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43310%2F19%3A43915018" target="_blank" >RIV/62156489:43310/19:43915018 - isvavai.cz</a>

Alternative codes found

RIV/61384399:31130/19:00052775

Result on the web

<a href="https://doi.org/10.1108/JEEE-11-2017-0093" target="_blank" >https://doi.org/10.1108/JEEE-11-2017-0093</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1108/JEEE-11-2017-0093" target="_blank" >10.1108/JEEE-11-2017-0093</a>

Result language

angličtina

Original language name

Investigating the differences in entrepreneurial success through the firm-specific factors: Microeconomic evidence from the Czech food industry

Original language description

Purpose: This paper aims to investigate the effect of firm-specific determinants on the entrepreneurial success (measured through the objective financial performance) of the Czech food processing firms over 2003-2014 and with the main particular focus on capital structure and productivity as the tough challenges of the firms in transition and emerging economies. Design/methodology/approach: Determinants of profitability are tested econometrically, as for the estimation technique, both-way fixed effects controlling for variety over the time and across enterprises were applied. The collected micro-panel data set consists of 10,509 observations and includes 1,804 firms. Estimated regression models with fixed effects are used to quantify the determinants of the financial performance, operationalized through three key performance indicators - price-cost margin, return on assets and return on equity. Findings: Estimated econometric models supported hypothesis assuming a positive relationship between the labour productivity and profitability. In line with the assumptions based on the development of the Czech food market, high leverage of firms led to the decrease of profitability, which can be explained by the high financial distress costs and worsened market position of firms in the competitive environment. Ageing of firms and firm size were associated with the increase of profitability indicators. Practical implications: The findings of the presented research are important for investors considering agribusiness as a part of their investment portfolios and for policymakers to enhance the economic efficiency of the food industry through regulations and public support, and particularly, from the firm management viewpoint, e.g. to pay attention to the debt policy due to the negative impact of high indebtedness on firm profitability, and to the productivity factors, which proved to be important drivers of entrepreneurial success. Originality/value: Although the firm-specific factors responsible for firm performance have already been studied, the food processing industry has received limited interest from the empirical analysts, and the results are not always unequivocal. This study is expected to contribute to the literature on this subject, both empirically and methodologically, as to the best of the authors&apos; knowledge, no study has been encountered yet where the factors determining the profitability of the Czech food processing industry have been the focus. With regards to the collected micro-data set and the estimation technique, the study can be considered as extensive not only from the perspective of the research in the Czech Republic but also from the international perspective.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50204 - Business and management

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2019

Confidentiality

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

Name of the periodical

Journal of Entrepreneurship in Emerging Economies

ISSN

2053-4604

e-ISSN

—

Volume of the periodical

11

Issue of the periodical within the volume

2

Country of publishing house

GB - UNITED KINGDOM

Number of pages

23

Pages from-to

154-176

UT code for WoS article

000469124000001

EID of the result in the Scopus database

2-s2.0-85055162599