Firm profitability is generally regarded as an important precondition for long-term firm survival and success; moreover, the variable significantly affects the firm’s achievement of other financial goals. Another factor explaining the importance of firm profitability is its effect on economic growth, employment, innovation, and technological change. However, due to increasing competition, improved efficiency, and pricing pressure, firms are experiencing greater difficulty attaining the required profitability. The question of what factors determine profitability should accordingly be one of high priority for both researchers and practitioners, including managers, investors, debt holders, and policy makers.

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