TITLE:
Panel Data Analysis of Profitability Determinants: Evidence from Indian Telecom Companies
AUTHORS:
Tasneem Khan, Mohd Shamim, Jatin Goyal
KEYWORDS:
Profitability, Panel Data, Determinants, Telecom Companies, NSE, India
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.15,
December
12,
2018
ABSTRACT: The elements determining
the profitability of companies have warranted special attention over time. The
levels of rising debt, increased concerns for liquidity and risks of bankruptcy
have impacted the revenue of manufacturing sector companies in general and
service sector companies in particular. In this study, an attempt has been made
to study the financial health of companies belonging to Indian telecom
industry. For this purpose, a balanced panel dataset of five Indian telecom
companies listed on National Stock Exchange (NSE) has been used to examine the
determinants of profitability over the period of 2004-2017. Profitability has
been taken as an explained variable whereas size, leverage, liquidity, non-debt
tax shield (NDTS), tangibility, growth opportunities and bankruptcy probability
(Altman Z-score) have been considered as explanatory variables. The findings of
the study reveal that the size and growth have a direct relationship with
profitability, whereas the leverage has an inverse relationship. Tangibility,
NDTS, liquidity and Z-score indicate insignificant impact on profitability.