Journal Article

Firm-Specific and Country-Specific Determinants of Profitability in the Pharmaceutical Industry in Egypt

محمد، مصطفى محمود عبدالمتعال, Eldomiaty, Tarek I

2025

Overview

This study investigates the firm-specific and country-specific determinants of profitability in Egypt's pharmaceutical industry, focusing on companies listed on the Egyptian Stock Exchange from 2006 to 2024. Employing a quantitative research approach, the analysis centers on key financial performance indicators-current ratio (CR), fixed asset turnover (FATO), total asset turnover (TATO) , and debt to equity ratio (DER) -and examines their influence on profitability, measured by return on assets (ROA) and return on equity (ROE). Preliminary findings indicate that a higher current ratio is positively correlated with ROA, suggesting that firms with better liquidity management achieve greater profitability. Conversely, the debt ratio exhibits a significant negative relationship with ROA, highlighting the financial risks associated with high leverage. Additionally, both FATO and TATO demonstrate strong positive associations with profitability, emphasizing the importance of efficient asset utilization in driving financial performance. In addition to firm-level factors, the research incorporates macroeconomic variables such as GDP growth, inflation, exchange rate and interest rate. to capture the broader economic context affecting the sector. The study utilizes panel data regression techniques to empirically assess the relationship between financial ratios and profitability, while also considering the impact of regulatory changes, market dynamics, and external economic shocks on financial outcomes. Findings are expected to identify the most significant financial and macroeconomic drivers of profitability, highlight differences between large and small firms, and compare the Egyptian context with global industry trends. The results will provide actionable insights for industry stakeholders, policymakers, and investors, offering recommendations to enhance financial performance and inform regulatory and investment decisions within the Egyptian pharmaceutical sector. Limitations include the focus on listed companies, potential data quality issues, and the challenge of isolating the effects of regulatory and economic volatility. Nevertheless, this research contributes to the literature by offering a comprehensive analysis of profitability determinants in a strategically important and rapidly evolving industry.

• Publisher: جامعة قناة السويس - كلية التجارة بالاسماعيلية
• Subject: الاقتصاد المصري / البورصة المصرية / التغيرات التنظيمية / الشركات المصرية / حقوق الملكية