IDEAS home Printed from https://ideas.repec.org/a/dug/actaec/y2024i4p139-158.html
   My bibliography  Save this article

The Effect of Macroeconomic Factors on the Profitability of Non-Finance Firms in South Africa

Author

Listed:
  • Emmanuel Okofo-Dartey

    (University of Education Winneba)

Abstract

This study examines the effect of macroeconomic factors on the profitability of non-finance firms in South Africa. Using an annual dataset of listed non-finance firms from 2006 to 2022, and employing the Generalized Method of Moments technique results show that, prior profits of the firms positively influence their current profit levels. The study finds that, interest rates negatively affect the profit levels of the firms. Again, the result of the study reveals that while inflation, exchange rates, corporate tax rates, work ethics, and unemployment negatively influence profitability through Return on Assets (ROAs), they impact the profitability of the firms positively through Return on Equity (ROE). Corruption was also found to positively influence profitability through ROA but negatively through ROE. Policymakers are advised to monitor the effects of macroeconomic variables and assess the net effect of the volatility of these variables on the behaviour of non-financial firms in their respective economies to address the various dynamics posed by the macroeconomic factors to firms.

Suggested Citation

  • Emmanuel Okofo-Dartey, 2024. "The Effect of Macroeconomic Factors on the Profitability of Non-Finance Firms in South Africa," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 20(4), pages 139-158, August.
    • Handle: RePEc:dug:actaec:y:2024:i:4:p:139-158
    as

    Download full text from publisher

    File URL: https://dj.univ-danubius.ro/index.php/AUDOE/article/view/2944/2883
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dug:actaec:y:2024:i:4:p:139-158. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniela Robu (email available below). General contact details of provider: https://edirc.repec.org/data/fedanro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.