Title: Efficiency, leverage and profitability: the case of Greek manufacturing sector

Authors: Christos Floros; Fotini Voulgaris

Addresses: Department of Accounting and Finance, Technological Educational Institute of Crete, Estavromenos, Heraklion, Crete, 71004, Greece; Hellenic Open University, School of Social Sciences, Greece ' Department of Accounting and Finance, Technological Educational Institute of Crete, Estavromenos, Heraklion, Crete, 71004, Greece

Abstract: In this article, we analyse manufacturing sector efficiency in Greece over the period 1996-2011. We compute DEA efficiency scores which we combine with a Tobit analysis to see whether efficiency scores play a role in explaining profitability and leverage. The results from 27 sub-sectors show that: 1) leverage has no effect on sectors' performance in terms of technical efficiency; 2) sub-sectors with a high level of technical efficiency enjoy a higher level of profitability. We argue that competitiveness may be an important indication for Greek firms.

Keywords: technical efficiency; profitability; manufacturing industry; data envelopment analysis; DEA; Tobit; leverage; Greece; competitiveness.

DOI: 10.1504/GBER.2016.076239

Global Business and Economics Review, 2016 Vol.18 No.3/4, pp.385 - 401

Received: 07 Mar 2014
Accepted: 25 Sep 2014

Published online: 29 Apr 2016 *

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