Authors: Yomna Abdulla
Addresses: College of Business Administration, University of Bahrain, P.O. Box 32038, Sakhir, Kingdom of Bahrain
Abstract: In this paper, we investigate the profitability of Bahraini and Qatari firms during the period 2007-2016. The study focuses on two aspects of profitability, first, its determinants, and second, the impact of the recent decline in oil prices on firms' profitability. Using two measures of profitability and applying various panel regression techniques, we find that the main significant determinants of profitability are fixed asset turnover, size, leverage, liquidity and age. The results also document the significant impact of the decline in oil prices on firms' profitability. This impact is similar and evident in both countries. Finally, the findings suggest the need for further government aid to be provided to firms during periods of declining oil prices.
Keywords: profitability; performance; Gulf Cooperation Council; GCC; oil prices; macroeconomic variables; Bahrain; Qatar; corporate finance; survival.
International Journal of Economics and Business Research, 2020 Vol.19 No.1, pp.70 - 87
Received: 08 Nov 2018
Accepted: 08 Mar 2019
Published online: 15 Nov 2019 *