What are the determinants affecting cooperatives' profitability? Evidence from Spain

This study focuses on the analysis of the determinants of Spanish cooperatives' profitability. We inspect several variables, whose influence on firms' profitability has been verified by prior literature, and we assess whether these results are confirmed in cooperatives. The data span 13 years (2008-20). We approach the analysis including: (i) firm-specific factors, (ii) industry-specific factors, and (iii) location factors. There is a main research question: Are there significant differences in cooperatives' profitability depending on firm-specific, industry-specific and/or location factors? The results emphasize that firm-specific effects are the most important for cooperatives' profitability. Summarizing our findings, cooperatives' profitability is positively affected by size, liquidity, indebtedness, regional specialization in cooperatives, location economies, and lagging profitability, and negatively affected by age and presence in international markets.