Regional characteristics of sports industry profitability: Evidence from China's province level data

Given its regionally lopsided development, the sports industry in China now largely features spatial and geographical agglomeration. Profitability is an important parameter for the sustainable development of an industry. It is interesting to make clear whether the profitability of Chinese sports industry features regional agglomeration. We firstly make a statistical analysis and probability density analysis by Random Matrix Theory (RMT) based on monthly provincial profit margin data of the sporting goods manufacturing industry listed from 2011 to 2015. We find that the profit margin of this industry is not randomly distributed over the regions. We also focus on the collective market effects of the profitability of this industry. Through the method of regression analysis on the largest 3 eigenvalues of the profit margin, we find that the eigenvalues reflect the collective market effects in Profit to Cost Ratio (PCR) and Return on Sales (ROS). At last, we search each correlation matrix of the profit margin for the clusters of provinces by using the clustering methods. We find the majority of the provinces can be categorized into clusters and most of the correlated provinces are adjacency or proximity. Our analysis provides a new understanding of the regional characteristics of sports industry profitability and offers potential practical values for the government and entrepreneurs. (C) 2019 Elsevier B.V. All rights reserved.