Determinant of Profitability: An Empirical Investigation of the Role of Financial Structure, Technological Innovation, and Managerial Attributes
Marian Mroziewski
Round 1
Reviewer 1 Report
Comments and Suggestions for Authors
Manuscript Title: - Determinant Of Profitability: Does Technological Innovation Matter?
Manuscript Number: economies-3978099
This study looks at how firm profitability in the Vietnamese electronics and electrical appliance sector is impacted by technological innovation. Using panel data from 23 listed businesses between 2015 and 2024, it examines several factors, including company size, management gender, fixed asset turnover, and leverage. The findings demonstrate that while financial leverage harms profitability, technical innovation, business size, and asset turnover have a favourable impact.
Comments:
- Please refer to the abstract “Our work was one of the first study on the impact of factors, emphasizing the role of technological innovation on the firm's profitability in the electronics and electrical appliance industry from a transitional economy”. There are several studies found on this research domains.
- Manuscript title of “Determinant of Profitability: Does Technological Innovation Matter? “doesn’t reflect the research work as a whole. The hypotheses considered in the present work investigates several domains. The empirical investigation of various financial ratios, Technological innovation, managerial aspects in managing profitability through the firm size and managerial gender hence it may be suitable modified. It could be “Determinants of Firm Profitability: An Empirical Investigation of the Role of Financial Structure, Technological Innovation, and Managerial Attributes” or on similar lines.
- Authors test the six hypotheses, which are mix of several domains. The hypotheses formulated lack the literature support. The provided literature looks very minimal. The cited references look very old. The literature from 2021-2025, very few articles are cited. Author should carry out comprehensive literature review to corroborate the research gap using past literature.
- “The Research Council of Norway reconfirmed … in the market’ may be cited pdf
- “The first systematic …. in 2021 by Jamai, De Steur, Abidar, and Gellynck (2021).” It is untrue, there are several prior works available.
- Expectation column against ROA and ROE may be filled in based on the hypotheses proposed. (Please refer Table 1. For Summary meaning and measure of key variables. Source: Author's Proposition)
- Econometric function may be suitable interpreted with obtained values.
- Few of the abbreviation needs its full expansions for better understanding.
- How manager's gender (COB) was obtained from financial results may be clarified.
- The authors ‘claim the first work in the technology innovation is untrue as well. The present work must be justified for its originality and novelty.
- The following research on technology innovation from sustainability may be cited:
Qureshi, K.M., Mewada, B.G., Kaur, S., Alghamdi, S.Y., Almakayeel, N., Almuflih, A.S. and Qureshi, M.R.N.M., 2023. Sustainable manufacturing supply chain performance enhancement through technology utilization and process innovation in industry 4.0: a SEM-PLS approach. Sustainability, 15(21), p.15388.
- Since the Vietnam’s electronic sector is shifting from assembly to technology driven (AI and smart manufacturing.) product development using government initiatives, and FDI. More work on the technology domain is warranted to provided novelty. At present the contribution looks minimal.
- The analysis needs to be supported by calculations or the methods used should be explained in brief.
The paper has some typos and writing issues:
- H2: a higher liability to equity ratio lead to a lower profitability should be H2: A higher liability to equity ratio lead to a lower profitability.
- The bold/highlighted text may be modified.
- ‘While This study focused…’ should be ‘While this study focused…’
Author Response
Dear Sir/Madam,
Thank you for providing us with valuable feedback and constructive comments regarding our manuscript “DETERMINANT OF PROFITABILITY: DOES TECHNOLOGICAL INNOVATION MATTER?” (Manuscript ID: economies-3978099).
On behalf of the authors, I would like to thank the reviewers for all useful and helpful comments on our manuscript. We have carefully considered all suggestions within a new revised manuscript. We strongly believe that our revision has significantly improved the quality of manuscript.
All comments have been taken into account, and the paper has been revised accordingly.
All revision in the manuscript were highlighted in yellow in the new version and letter with point to point response to the reviewers' comments.
Reviewer 1
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Reviewer 1 Comment |
Our Response |
Changes in Manuscript (Page/Line) |
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Comment 1.1: Please refer to the abstract “Our work was one of the first study on the impact of factors, emphasizing the role of technological innovation on the firm's profitability in the electronics and electrical appliance industry from a transitional economy”. There are several studies found on this research domains |
We totally agree with the reviewer that our work was not one of the first study on the impact of factors. There are several studies found on this research fields |
Page 1, Lines 5-6 |
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Comment 1.2: Manuscript title of “Determinant of Profitability: Does Technological Innovation Matter? “doesn’t reflect the research work as a whole. The hypotheses considered in the present work investigates several domains. The empirical investigation of various financial ratios, Technological innovation, managerial aspects in managing profitability through the firm size and managerial gender hence it may be suitable modified. It could be “Determinants of Firm Profitability: An Empirical Investigation of the Role of Financial Structure, Technological Innovation, and Managerial Attributes” or on similar lines. |
The authors would like to make revision according to the reviewers’ comments. . new title of the manuscript: “Determinants of Firm Profitability: An Empirical Investigation of the Role of Financial Structure, Technological Innovation, and Managerial Attributes” |
Page 1, Lines 1-3 |
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Comment 1.3: Authors test the six hypotheses, which are mix of several domains. The hypotheses formulated lack the literature support. The provided literature looks very minimal. The cited references look very old. The literature from 2021-2025, very few articles are cited. Author should carry out comprehensive literature review to corroborate the research gap using past literature |
We agree with the reviewer that the several cited references seem to be out of date. The authors have added one more citation into the development of emperical hypothesis. New articles cited met the criteria as below: + Indexed in Scopus or WoS + Research units are non-financial enterprises (this means that banks – Insurance - Securities will be excluded). We have added a basis for building hypotheses. We have added articles in the period 2021-2025, which are: + In hypothesis 1, there was the document Jati et al. (2023), Mahor & Banerji (2024) + In hypothesis 2, Amin and Cek (2023) was updated and supplemented + In hypothesis 3 added Endri et all (2021), and Li (2024) |
Page 12, Lines 438-441; 444-445
Page 3, Lines 105-115
Page 3-4, Lines 137-143
Page 4, Lines 162 -168 |
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Comment 1.4: “The Research Council of Norway reconfirmed … in the market’ may be cited pdf |
This document was quoted from an article in an online magazine, so there is no full-text pdf file. We have cited another work with more complete and authoritative sources instead. |
Page 1, Lines 20 - 27 |
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Comment 1.5: “The first systematic …. in 2021 by Jamai, De Steur, Abidar, and Gellynck (2021).” It is untrue, there are several prior works available. |
We totally agree with the reviewer that several prior works are available. |
Page 4, Lines 171 - 174 |
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Comment 1.6: Expectation column against ROA and ROE may be filled in based on the hypotheses proposed.
(Please refer Table 1. For Summary meaning and measure of key variables. Source: Author's Proposition) |
Both ROA and ROE were dependent variables (proxied as firm's profitability), so we do not include an additional column with expected signs We have added the meanings of the main variables to table 2,4,5 |
Page 9-11
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Comment 1.7: Econometric function may be suitable interpreted with obtained values. |
The authors would like to make revision according to the reviewers’ comments . We added the Hypothesis testing column in table 5 |
Page 11, table 5 |
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Comment 1.8: Few of the abbreviation needs its full expansions for better understanding. |
The authors would like to make revision according to the reviewers’ comments. We explained few of the abbreviations in more detail for better understanding its meaning |
Page 5 - 6, Lines 234-246 |
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Comment 1.9: How manager's gender (COB) was obtained from financial results may be clarified. |
The authors would like to make revision according to the reviewers’ comments. We explained that the gender of Chairman is taken from the Corporate's Annual Report, which includes a list of Board members. |
Page 7, Lines 258-260 |
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Comment 1.10: The authors ‘claim the first work in the technology innovation is untrue as well. The present work must be justified for its originality and novelty. |
We totally agree with the reviewer that this article is not the first work in the technology innovation. The effect of FAT represented significantly in model ROE. This is a determinant which hasn't mention in prior studies about determinant of profitability. Specifically, previous literatures only have focus total asset turnover ratio. However, total asset turnover ratio often suitable for overall business analysis, firms oriented - technologies like electronics and electrical appliance seem to be pay more attention the efficiency of fixed asset usage |
Page 12, 427-431 |
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Comment 1.11: The following research on technology innovation from sustainability may be cited: Qureshi, K.M., Mewada, B.G., Kaur, S., Alghamdi, S.Y., Almakayeel, N., Almuflih, A.S. and Qureshi, M.R.N.M., 2023. Sustainable manufacturing supply chain performance enhancement through technology utilization and process innovation in industry 4.0: a SEM-PLS approach. Sustainability, 15(21), p.15388. |
The authors would like to make revision according to the reviewers’ comments. We cited this study in our manuscript. |
Page 4, Lines 185-187 |
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Comment 1.12: Since the Vietnam’s electronic sector is shifting from assembly to technology driven (AI and smart manufacturing.) product development using government initiatives, and FDI. More work on the technology domain is warranted to provided novelty. At present the contribution looks minimal. |
The authors would like to make revision according to the reviewers’ comments. We added some documents related to the electronics and electrical industry in Vietnam and the policy mechanism of the Vietnamese government. |
Page 8 - 9, Lines 307- 339 |
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Comment 1.13: The analysis needs to be supported by calculations or the methods used should be explained in brief. |
The authors would like to make revision according to the reviewers’ comments. We have consulted the research method and additionally cited one paper from the journal Economies |
Page 4, Lines 162-168
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Comment 1.14: The paper has some typos and writing issues: · H2: a higher liability to equity ratio lead to a lower profitability should be H2: A higher liability to equity ratio lead to a lower profitability. · The bold/highlighted text may be modified. ‘While This study focused…’ should be ‘While this study focused…’ |
The authors would like to make revision according to the reviewers’ comments.
We repaired these typos and writing issues |
Page 4, Lines 144
Page 14, Lines 524
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We sincerely thank the editor and the reviewers for their time and effort in reviewing our manuscript. We believe that the new manuscript is more stronger and more robust as a result of their insightful comments.
We hope that the revised manuscript is now suitable for publication in MDPI. We look forward to hearing from you soon.
Sincerely,
Corresponding author
Thi Du Pham
Reviewer 2 Report
Comments and Suggestions for Authors
The aim of the reviewed study was to identify the factors determining the profitability of enterprises in the electronics and electrical equipment industry in Vietnam, based on a sample of 23 manufacturers (row: 232). Six research hypotheses were adopted for the study. The study addressed the macroeconomic challenges of the Vietnamese economy related to foreign direct investment in the electronics and electrical equipment industry. The study was conducted from 2015 to 2024. Data for the study were obtained from the financial statements and annual reports of companies listed on stock exchanges.
Notes on the reviewed study:
1) the content of the topic, summary, and conclusions are poorly aligned with the content of the study;
2) a clear description of the research methodology should be provided separately for the entire industry (216-217 observations) and for the sample of 23 enterprises (the study results are difficult to identify);
3) The varying number of observations (23, 216, 217, 181) and the variable ε i,t (line: 234) should be explained;
4) The criteria for the statistical analyses used should be precisely described, e.g., why a sample size of 0.8 was used; variance inflation below 5; and the rationale for using multiple statistical methods should be identified;
5) The rationale for constructing Table 4 and introducing the null hypothesis (line: 363) should be indicated;
6) No rationale for accepting or rejecting the six hypotheses was demonstrated;
7) The study indicated (line: 408) that the profitability of the analyzed companies was determined by several key factors, but the fundamental significance of technological innovation in shaping profitability was not demonstrated by applying specific assumptions.
Author Response
Dear Sir/Madam,
Thank you for providing us with valuable feedback and constructive comments regarding our manuscript “DETERMINANT OF PROFITABILITY: DOES TECHNOLOGICAL INNOVATION MATTER?” (Manuscript ID: economies-3978099).
On behalf of the authors, I would like to thank the reviewers for all useful and helpful comments on our manuscript. We have carefully considered all suggestions within a new revised manuscript. We strongly believe that our revision has significantly improved the quality of manuscript.
All comments have been taken into account, and the paper has been revised accordingly.
All revision in the manuscript were highlighted in yellow in the new version and letter with point to point response to the reviewers' comments.
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Reviewer 2 Comment |
Our Response |
Changes in Manuscript (Page/Line) |
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Comment 2.1: The content of the topic, summary, and conclusions are poorly aligned with the content of the study.
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The authors would like to make revision according to the reviewers’ comments. We revised the title, abstract, and conclusion in order to be consistent the main content of this study. |
Page 1, Lines 1-7 Page 13, Lines 481-483; 490-500 |
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Comment 2.2: A clear description of the research methodology should be provided separately for the entire industry (216-217 observations) and for the sample of 23 enterprises (the study results are difficult to identify); |
The varying number of observations is explained specifically as follows: + Number 23 is the number of enterprises in the Electronic & Electrical Equipment sector listed on the Vietnamese stock market. + Number 216, 217 are the number of observations of variables when analyzing descriptive statistics + Number 181 is the number of observations of the FEM, FGLS model estimation + The variable ε i,t (line: 234) is the random error in a panel data estimation |
Page 5, Lines 227
Page 9, table 2
Page 11, table 4
Page 7, Lines 281
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Comment 2.3: The varying number of observations (23, 216, 217, 181) and the variable ε i,t (line: 234) should be explained;
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Comment 2.4: The criteria for the statistical analyses used should be precisely described, e.g., why a sample size of 0.8 was used; variance inflation below 5; and the rationale for using multiple statistical methods should be identified. |
Socio-economic context causes multicollinearity. Normally, correlation coefficient above 0.8 is not accepted, this is because the two variables are too similar. 5 > VIF > 1: acceptable No multicollinearity issue
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Page 10, Lines 376
Page 10, table 3 |
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Comment 2.5: The rationale for constructing Table 4 and introducing the null hypothesis (line: 363) should be indicated; |
The authors would like to make revision according to the reviewers’ comments. We have added an introductory sentence before described Table 4 on the theoretical foundation for the FEM model. |
Page 10, Lines 381-383 |
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Comment 2.6: No rationale for accepting or rejecting the six hypotheses was demonstrated |
The authors would like to make revision according to the reviewers’ comments. We have added a description in the section of research method related to hypothesis testing |
Page 6, Lines 246-247 |
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Comment 2.7: The study indicated (line: 408) that the profitability of the analyzed companies was determined by several key factors, but the fundamental significance of technological innovation in shaping profitability was not demonstrated by applying specific assumptions. |
The authors would like to make revision according to the reviewers’ comments. We have added the obtained regression equation. We have interpreted the meaning of the regression coefficients, when technological innovation increases by 1 unit (assuming other factors remain unchanged), how many units does profitability increase? |
Page 12, Lines 417-421 |
We sincerely thank the editor and the reviewers for their time and effort in reviewing our manuscript. We believe that the new manuscript is more stronger and more robust as a result of their insightful comments.
We hope that the revised manuscript is now suitable for publication in MDPI. We look forward to hearing from you soon.
Sincerely,
Corresponding author
Thi Du Pham
Round 2
Reviewer 1 Report
Comments and Suggestions for Authors
No suggestions
Reviewer 2 Report
Comments and Suggestions for Authors
The amendments introduced address previously identified shortcomings. It can be published in its current form.
