Effects of the Greek Financial Crisis to the Food Manufacturing Firms

The objective of this study is to draw conclusions about changes over the crisis period in firm performance, using accounting data for 331 food and beverage manufacturing firms in the period from 2005 until 2016. The present study aims to advance our knowledge in three distinct ways: first none of the studies investigated what happened after 2012, second, we split our data in three groups: before crisis (2005–2008), first period of crisis (2009–2012) and second period of crisis (2013–2016), and third taking into account that the implementation of the strict austerity program for Greece in 2010 caused a substantial decrease in demand for goods and services pushing the Greek firms to a deeper recession, we examine differences between the years before 2011 (2005–2010) where the real crisis for Greece started with the implementation of austerity measures, and after 2011 (2011–2016). Fixed effects results suggest that, during economic crisis the efficient and older firms are most profitable, indicating that older firms have the ability, the structure and the experience to achieve a higher profitability. Leverage is negatively related to profitability, which shows that large interest rates due to economic crisis associated with high debt levels result to lower profits while the results provide evidence for a non linear relationship between market share and profitability.