Certification of Portuguese companies as an inducer of profitability: A panel data approach

  • 233 Views
  • 56 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

With the globalization and internationalization of markets, companies need to be more competitive and offer high-quality guarantees to consumers, suppliers, banking institutions, and shareholders. Thus, the objective of this paper is to measure the impacts that these guarantees, analyzed through quality management, environmental management, and management of occupational health and safety standards, will have on the return on assets (ROA) of companies classified by sector of activity, considering each of the certifications individually and as a whole. The panel data approach methodology was used for 10 years in Portuguese-certified companies between 2010 and 2019. The Chow test, the Breusch-Pagan, and the Hausman test were applied to identify a more feasible model between the pooled OLS and the random or fixed effects model. Furthermore, the cluster-robust standard errors model was applied.
The results show the existence of synergies when adopting more than one certification to improve firm performance. Moreover, the single certification estimate by sector results are significant and can be positive drivers of profitability, but only for companies in the manufacturing industries related to natural resources. However, they trigger negative results in the accommodation, catering, and information and communication sectors.

Acknowledgment
This paper is funded by National Funds through the FCT – Foundation for Science and Technology, I.P., within the scope of the project Refª UIDB/05583/2020. Furthermore, we would like to thank the Research Centre in Digital Services (CISeD) and the Instituto Politécnico de Viseu, for their support.

view full abstract hide full abstract
    • Table 1. Dynamics of certified companies (2010–2019)
    • Table 2. Sectors of activity
    • Table 3. Summary of dependent and independent variables
    • Table 4. Correlation coefficients
    • Table 5. Results of the ISO9001 regression model
    • Table 6. Results of the ISO14001 regression model
    • Table 7. Results of the OHSAS18001 regression model
    • Table 8. Results of the regression model by sector
    • Table 9. Results of the regression model for the multiple certifications
    • Table A1. Empirical studies
    • Conceptualization
      Anabela Santos, António Pedro Pinto, Pedro Reis
    • Data curation
      Anabela Santos, António Pedro Pinto, Pedro Reis
    • Formal Analysis
      Anabela Santos, António Pedro Pinto, Pedro Reis
    • Investigation
      Anabela Santos
    • Methodology
      Anabela Santos
    • Project administration
      Anabela Santos, António Pedro Pinto, Pedro Reis, Elisabete Neves
    • Resources
      Anabela Santos
    • Software
      Anabela Santos, António Pedro Pinto, Pedro Reis
    • Validation
      Anabela Santos, António Pedro Pinto, Pedro Reis, Elisabete Neves
    • Visualization
      Anabela Santos, Elisabete Neves
    • Writing – original draft
      Anabela Santos, António Pedro Pinto, Pedro Reis
    • Writing – review & editing
      Anabela Santos, António Pedro Pinto, Pedro Reis, Elisabete Neves
    • Funding acquisition
      António Pedro Pinto, Pedro Reis
    • Supervision
      António Pedro Pinto, Pedro Reis, Elisabete Neves
Related Articles

  • Positive contribution of the good corporate governance rating to stability and performance: evidence from Indonesia

    RR. Iramani , Muazaroh Muazaroh , Abdul MongidORCID doi: http://dx.doi.org/10.21511/ppm.16(2).2018.01
    Problems and Perspectives in Management Volume 16, 2018         Issue #2         pp. 1-11 Views: 2979 Downloads: 251 TO CITE АНОТАЦІЯ

    This paper aims to examine the impact of Good Corporate Governance (GCG) practice on bank stability and performance. Governance is measured using the GCG rating that covers eleven aspects. The authors apply instrumental regression to link governance to performance and stability. The study covers a sample of 150 banks. The result shows that bank stability can mediate bank governance and bank performance. On the determinant of bank performance, it can be concluded that the GCG rating is positive and directly influences bank performance. Bank stability is also positive for bank performance indicating the indirect contribution of the GCG rating to bank performance. NPL, LDR, CAR and bank’s size (LASSET) are all negative and significant. The aim of this paper is to provide strong empirical evidence on the importance of governance and stability for performance. The limitations of this paper are the size of the sample and that it only covers public banks which are theoretically required to apply better governance in all aspects of their business by the Capital Market Authority.

  • The impact of political instability, macroeconomic and bank-specific factors on the profitability of Islamic banks: an empirical evidence

    Ali T. Yahya , Asif Akhtar , Mosab I. TabashORCID doi: http://dx.doi.org/10.21511/imfi.14(4).2017.04
    Investment Management and Financial Innovations Volume 14, 2017         Issue #4         pp. 30-39 Views: 2149 Downloads: 379 TO CITE АНОТАЦІЯ

    This study investigates the impact of political instability, macroeconomic and bank-specific factors on the profitability of Islamic banks in the context of Yemen. The study used two common measures of profitability, namely, Return on Assets (ROA) and Return on Equity (ROE) as dependent variables. Seven key independent (internal and external) variables are also used. There are five fully-fledged Islamic banks (IBs) working in Yemen. The study selected only three out of five IBs due to the availability of data for the period ranging from 2010 to 2014. The descriptive and multiple regression analyses were done. The results of the study indicate that operating efficiency and financial risk have negative and significant relationships with ROA and ROE. The findings also show that capital adequacy has a negative and insignificant relationship with ROA and ROE. Furthermore, the study reveals that assets size (LogA), assets management, liquidity and deposits have a significant and positive impact on banks’ profitability. GDP, Inflation rate (IR) and Political instability have positive and significant impact on Yemeni banks’ profitability. Based on the best knowledge of the authors, this study is considered one of the first and pioneering studies that determine the factors affecting the profitability of Islamic banks of Yemen. Therefore, the study gives good insights for the policy makers, regulators and interested parties for enhancing the profitability of Islamic banks in Yemen.

  • Liquidity, leverage, and solvency: What affects profitability of industrial enterprises the most?

    Maha D. AyoushORCID , Ahmad A. ToumehORCID , Khaled I. Shabaneh doi: http://dx.doi.org/10.21511/imfi.18(3).2021.22
    Investment Management and Financial Innovations Volume 18, 2021         Issue #3         pp. 249-259 Views: 1688 Downloads: 884 TO CITE АНОТАЦІЯ

    The purpose of this paper is to show the relative impact of liquidity, leverage, and solvency on profitability of industrial enterprises listed on the Amman Stock Exchange to ascertain which of them has the most effect on profitability. To reach the objectives of this study, 44 Jordanian industrial companies are examined from 2012 to 2018. Return on assets (ROA) and return on equity (ROE) are examined as measures of performance, current ratio and quick ratio as measures of liquidity, debt ratio and debt to equity ratio as measures of leverage, and the interest coverage ratio as a measure of financial solvency. Multiple regression analysis was used to check the hypotheses. A negative and statistically significant impact was found at the 1% level between financial leverage and profitability. At the same time, findings did not show the same for the effect of liquidity and solvency on profitability. In addition, leverage has the highest relative impact among independent variables on profitability, followed by solvency and then liquidity. Moreover, it is indicated that company size is a control variable of the effect between liquidity, leverage, and solvency on performance. Thus, it is concluded that management of industrial companies should reduce dependence on debt to finance companies to achieve the highest possible returns; it is recommended to maintain an acceptable level of liquidity to ensure the continuity of companies and attention to the level of solvency within companies to maintain a high financial performance.

Download Preview
Close
Problems and Perspectives in Management
Problems and Perspectives in Management