Accounting and Non-Accounting Information on Firms’ Profitability: The case of Greece and Cyprus

In this paper, we evaluate the profitability for firms in Greece and Cyprus from 2005 to 2020. More specifically, we investigate the effect of non-accounting variables, which affect the daily life of companies, on the firms' level profitability. We seek to investigate the impact of corruption, unemployment, part-time employment, and R&D on the performance of companies that can help managers by giving them more information and serving them in future decision making. We show that these variables do not have a large effect on the firm-level profitability of these two countries, which is largely influenced by profit margin and other interaction variables, such as profit margin on asset turnover ratio and equity multiplier. Based on the results, we see that companies should put more emphasis on R&D and strengthen the labor market by reducing any negative speculation in the country.