Comparative analysis of profitability of real estate, industrial construction and infrastructure firms: evidence from India

J. C. Edison · Harish Kumar Singla

32 citations0/0 files storedJournal of Financial Management of Property and Construction

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Financial Analysis and Corporate Governance Corporate Finance and Governance Real estate and construction management

Abstract

Purpose This study aims to identify the most profitable segment of construction firms amongst real estate, industrial construction and infrastructure. This paper also examines the determinants of profitability of real estate, industrial construction and infrastructure firms. Design/methodology/approach The data of 67 firms (20 real estate, 21 industrial construction and 26 infrastructure) is collected for a 15-year period (2003–2017). Two models are created using total return on assets (ROA) and return on invested capital (ROIC) as dependent variables.. Leverage, liquidity, age, growth, size and efficiency of the firm are identified as firm-specific independent variables. Two economic variables, i.e. growth in GDP and inflation, are also used as independent variables. Initially, the models are tested for stationarity, multicollinearity and heteroscedasticity, and finally, the coefficients are estimated using Arellano–Bond dynamic panel data estimation to account for heteroscedasticity and endogeneity. Findings The results suggest that industrial construction is the most profitable segment of construction, followed by real estate and infrastructure. Their profitability is positively driven by liquidity, efficiency and leverage. The real estate firms are somewhat less profitable compared to industrial construction firms, and their profitability is positively driven by liquidity. The infrastructure firms have low ROA and ROIC. Originality/value The real estate, infrastructure and industrial construction drastically differ from each other. The challenges involved in real estate, infrastructure and industrial construction are altogether different. Therefore, authors present a comparative analysis of the profitability of real estate, infrastructure and industrial construction segments of the construction and compare their determinants of profitability. The results provided in the study are robust and reliable because of the use of a superior econometric model, i.e. Arellano–Bond dynamic panel data estimation with robust estimates, which accounts for heteroscedasticity and endogeneity in the model.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 32 citations exist upstream.

References

2002Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis 1992Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis 2018Dealing with endogeneity bias: The generalized method of moments (GMM) for panel data 2002Is performance driven by industry‐or firm‐specific factors? A new look at the evidence 2006Relationship Between Working Capital Management and Profitability of Listed Companies in the Athens Stock Exchange 2005Determinants of profitability in European manufacturing and services: evidence from a dynamic panel model 1997The Search for the Best Financial Performance Measure 2018Factors affecting profitability in Malaysia

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.