Economic Analysis: Theory and Practice

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Profitability of chemical industry enterprises in the turbulent economy: Modeling by form of ownership

Vol. 17, Iss. 9, SEPTEMBER 2018

Received: 17 July 2018

Received in revised form: 27 July 2018

Accepted: 9 August 2018

Available online: 28 September 2018


JEL Classification: C5, F23, G32, L65, O14

Pages: 1604–1621

Spitsyn V.V. National Research Tomsk Polytechnic University (TPU), Tomsk, Russian Federation

Trifonov A.Yu. National Research Tomsk Polytechnic University (TPU), Tomsk, Russian Federation

Ryzhkova M.V. Tomsk State University (TSU), Tomsk, Russian Federation

Spitsyna L.Yu. National Research Tomsk Polytechnic University (TPU), Tomsk, Russian Federation

Importance The article considers the efficiency (profitability) of industrial enterprises in Russia and contributing factors under turbulent economy and adverse external environment.
Objectives The study focuses on simulation of factors influencing the profitability of Russian, foreign and jointly owned enterprises operating in the chemical industry. We ran simulation under unstable economy for 2012–2016.
Methods The study draws on regression analysis of panel data, boxplots and analysis-of-variance methods to identify differences between groups of enterprises.
Results The boxplots and variance analysis demonstrate a decrease in return on net assets of Russian chemical industry enterprises in 2013–2015 and negative impact of debt. Regression models proved highly significant negative impact of debt capital on net profitability of assets of enterprises of all ownership forms. We revealed negative impact of a fall in exchange rate of the national currency on return on assets, which is especially true for foreign- and jointly owned enterprises. We also established similarities and differences in the impact of various factors on return on assets between the total sampling of enterprises and foreign-invested enterprises.
Conclusions The share of borrowed capital is one of the main factors affecting the profitability of chemical industry enterprises. The Federal government should channel efforts to reducing the cost of loans for businesses. Owners of foreign-invested enterprises should avoid using foreign currency loans under unstable economy of the host country, as they may cause losses during crisis periods.

Keywords: profitability, turbulent economy, foreign-invested enterprise, chemical industry, econometric modeling


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