Aquaculture is a worldwide industry that plays an increasingly important role in global food production. In Europe, the aquaculture sector is diverse, encompassing traditional, artisanal and family small businesses to multinational marine farming companies, which accounts for about 20% of fish production and directly employs roughly 80,000 people between full and part-time jobs (EU, 2016).
Nevertheless, despite the growing importance and high priority assigned by the EU policy makers to the development of aquaculture, so far little attention has been given to analyze the economic performance of the sector (Guillen et al., 2015). In the last two decades the entire sector has faced increased market competition, falling/stable prices and rising production costs what have affected the profitability of this sector. Nevertheless, the economic performance of firms presents significant differences that would be necessary to analyze to know which factors are relevant to obtain the best results.
The aim of this work is to analyze which factors can explain differences in firms’ profitability in the European aquaculture industry. A sample of firms of the aquaculture industry from Croatia, Greece, Norway, Spain, and Sweden were identified in the Amadeus database and annual economic data of those firms from 2009 to 2013 was collected and averaged to carry out our analysis. Main descriptive statistics of the sample are showed in Table 1. With this sample, we regressed the following model by each country employing the OLS methodology:
Our findings are presented in Table 2 . The results support that the firms’ profitability is significantly explained by the operating margins . However , efficiency is not significant in the case of Greek and Spanish firms so that there is room for improvement in the European aquaculture industry to improve this factor. On the other hand, the strategies of product differentiation with product certifications and diversification through vertical integration are both positively related to the firms’ profitability of Norwegian and Spanish firms.