Profitability in the Italian Wine Sector: An Empirical Analysis of Cooperatives and Investor-Owned Firms
Journal Title: International Journal of Academic Research in Accounting, Finance and Management Sciences - Year 2014, Vol 4, Issue 3
Abstract
This study compares the profitability of cooperatives and investor-owned firms in the Italian wine sector. From a review of the financial ratios that have traditionally been applied in previous studies, we identify the key factors that affect firm profitability (proxied by sales growth) and analyse them for the five-year period from 2008 to 2012. Italian wine cooperatives offer a particularly suitable environment in which to apply our study because they have benefitted from EU regulation and several supporting measures since 2008, allowing them to invest in infrastructure and improve efficiency in order to produce quality wine, grow their brands, and penetrate export markets. In particular, this study expands the body of knowledge on this topic by focusing on the factors that affect the profitability of cooperatives and investor-owned firms and by considering time series data. We find that the EU support measures for cooperatives have led to an increase in their financial performance since 2008. Moreover, cooperatives typically have lower liquidity levels and significantly high debt as a proportion of net equity compared with investor-owned firms. Hence, consistent with the findings in the literature, the influence of financial performance on profitability is clearly related to business type.
Authors and Affiliations
Marco Fazzini, Antonella Russo
Granger Causality Analysis between Inflation, Debt and Exchange Rate: Evidence from Malaysia
Sweeping inflation across the globe and historical high domestic inflation that reached two digits in Malaysia in 1974. Also, warning from Wall Street Journal of growing domestic debt and newly defined external debt star...
Investigating the Effect of Audit Quality on Over-investment Using Measures of Auditor Specialty and Audit Tenure for Listed Companies in Tehran Stock Exchange
Relationship between Cash Conversion Cycle (CCC) with Firm Size and Profitability
There are two main areas in which this article focus (1) checking the length of cash conversion cycle with respect to the size of the firms. (2) Examining the length of CCC with respect to the profitability of the firm....
Analyzing the Effect of Performance Appraisal Errors on Perceived Organizational Justice
Earnings Management around Research and Development Manipulation
The aim of this paper is to investigate the impact of research and development investment (R&D) on managers’ behaviour. Specifically, considering that R&D is a specific investment, inherently exposed to a high level of u...