Norway’s seafood sector stands as a cornerstone of its economy, fueled by the nation’s expansive coastline and rich marine resources. This paper delves into the profitability dynamics of Norway’s seafood firms, examining the impact of external shocks on their financial performance. Drawing upon firm-level data spanning from 2005 to 2020, we employ a dynamic panel data econometric approach to unravel the intricate relationship between profitability and external shocks. Our analysis disaggregates the seafood industry into five distinct segments of the sector supply chain: fishing, aquaculture, processing, services, and trade, offering insights into the vulnerabilities and resilience mechanisms within each segment.
Amidst the backdrop of the COVID-19 pandemic and previous economic upheavals, our findings shed light on the determinants of profitability in Norway’s seafood firms. Leveraging the Generalized Method of Moments (GMM) estimation approach, we address endogeneity concerns inherent in panel data analyses, ensuring the consistency and robustness of our results. Our methodology accounts for the complex interplay between lagged dependent variables, predictors, and unobserved individual effects, providing nuanced insights into the sector’s response to external shocks.
Through the empirical analysis and validation, this study contributes to the broader discourse on the resilience of export-driven industries in the face of global uncertainties. By identifying key factors driving profitability and elucidating the transmission channels of external shocks, policymakers and industry stakeholders can formulate targeted strategies to fortify Norway’s seafood sector against future disruptions.