Technological capabilities and rent eroding battles: Scandinavia centric evidence on firm profitability Online publication date: Thu, 30-Jan-2020
by Muhammad Azeem Qureshi; Tanveer Ahsan; Saqib Aziz; Muhammad Yousaf
International Journal of Economics and Business Research (IJEBR), Vol. 19, No. 2, 2020
Abstract: This paper furthers our understanding towards determinants of firm profitability using the data of listed firms from Scandinavia over the period from 2002 to 2015. Applying robust generalised method of moments (GMM) and ANCOVA techniques, we show that firm size, capital intensity, leverage, and growth are the major drivers of firm profitability in Scandinavia. A predominantly positive effect of size over profitability is in line with the broader prior evidence while a simultaneous negative capital intensity-profitability relationship is in contrast with the evidence from rest of the Europe. This contrasting effect may potentially be explained as an outcome of a suboptimal deployment of technological investments and/or rent-eroding battle among the incumbent firms operating in Scandinavia. Our results are robust to reverse causality and alternate proxies of capital intensity.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Business Research (IJEBR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook