What drives the profitability of Indian handloom enterprises? An insight based on the seemingly unrelated regression model

Abstract

Purpose This study aims to extend the discussion on firm profitability to include handloom enterprises in India. Design/methodology/approach This study uses a random sample of 427 handloom microentrepreneurs from the Indian state of Assam. The seemingly unrelated regression model is used to determine the profitability drivers in India’s handloom enterprises. Findings The empirical results revealed that human, financial and social capital, along with their control variables such as information and communication technology, firm size and sales distribution, are the main drivers of profitability of Indian handloom enterprises. Originality/value To the best of the authors’ knowledge, this study is the first to offer an in-depth insight into what makes profitability in the handloom enterprises in India, the world’s second-largest reservoir of the handloom industry.