Firm size and profitability in a strategic sector. Reflections from Italy in the digital age Online publication date: Wed, 20-Jan-2021
by Pietro Pavone
International Journal of Digital Culture and Electronic Tourism (IJDCET), Vol. 3, No. 2, 2020
Abstract: The global phenomenon of digital transformation is the key driver of future sustainable development. The purpose of this paper is to analyse the impact of firm size on profitability in a sector that is strategic for Italian digital development. The study uses balance sheet data from 638 companies of the Italian telecommunications sector in the years 2009-2018. ROA, ROE and net profit ratio are used as indicators of company profitability, while total assets and total sales as size indicators. Asset turnover was chosen as a necessary control variable. Empirical analyses include descriptive statistics, correlation test and the regression method completed by the analysis of collinearity. The results show a weak relationship between the size indicators and the net profit ratio. So, the paper indicates future research opportunities about the role of others possible success factors for the telecommunications sector in the modern digital age.
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