Browsing by Author "Gebrehiwet Romha"

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    Determinants and Trend Analysis of Profitability of EFFORT Companies; Economic Performance Analysis in case of Tigrai:
    (Mekelle University, 2025-10-25) Gebrehiwet Romha
    The purpose of the study was to examine what determines profitability, its trend healthiness and to extent that war caused profitability to shift down in EFFORT companies in the Tigrai Region, Ethiopia. Using an unbalanced dataset of 16 companies selected from 17 total companies based on data availability criteria, a census sample design of company-level secondary data were collected between 2010 and 2024 and analyzed using the generalized method of moments (GMM) technique, specifically the system GMM estimator. Unlike existing studies that adopted inappropriate models and misusage of LDPD models, this study properly used the standard step-by-step analysis of the LDPD models for the identification of determinants; and the panel data trends as well as DID models for the trend analysis and war effect estimation of EFFORT companies’ profitability, respectively. Having passed all the basic tests, the persistent LDPD model becomes jointly and strongly significant. The empirical results show that lagged profitability, cost efficiency, managerial efficiency, working capital and market competition are the significant EFFORT-level major determinants of profitability in Tigrai. However, the roles of liquidity, company growth, and capital intensity variables were not validated by this study. In addition, these companies have been experiencing inconsistent and fluctuating profitability trends over the same time range. Similarly, the Tigrai war experienced a very huge negative shift and downtrending effect on profitability during the war period. Thus, these findings implied that EFFORT companies have had serious and significant efficiency gap in resource utilizations and cost management, which in turn affects the economic performance of Tigrai Region. This study has also summary policy implications that EFFORT corporate should focus on maximizing innovation efficiency and productivity by relocating resources to more productive performers. Besides, as current profitability largely depends on contemporaneous capacities and efforts, EFFORT leadership needs to give attention to continuous reforms like freeing these companies from political intervention, letting them focus on business agendas only, and thereby improving the unhealthy profitability trends.