An econometric analysis of the Greek wine industry’s performance determinants

Purpose This study aims to investigate the key determinants of firm performance in the Greek wine sector. The analysis focuses on firms’ balance sheet structure and operational characteristics, emphasizing liquidity conditions, debt composition, working capital management, investment activity and firm-specific attributes. Design/methodology/approach This study uses panel data from 67 Greek wineries (2013–2024) to analyze profitability via return on assets. The model incorporates internal determinants, including liquidity, debt structure (short/long-term), working capital, capital expenditure, size and age, applying a one-year lag to financing and investment variables to account for delayed impacts. Estimation is performed using pooled ordinary least squares and random effects models, supported by diagnostic tests to ensure robustness. Findings The analysis reveals that liquidity, debt (short- and long-term), efficient working capital management and investment activity all significantly boost firm performance. Notably, long-term debt shows a stronger positive impact on ROA than short-term debt, emphasizing the importance of strategic financing for long-term growth. Conversely, firm size is negatively correlated with performance, pointing toward diseconomies of scale or increased coordination costs in large operations. Profitability is driven primarily by financial metrics rather than the length of time a firm has been operating. Originality/value This research contributes to the literature on the Greek wine industry, presents empirical data on the factors that shape business performance and supports the design of effective strategies and policies.