The nexus between non-oil firms and profitability: A Systematic literature review from the last two decades

Not much attention is given to the financial performance of non-oil firms in oil producing economies as the focus would be on firms operating in the country’s major industry. However, fluctuating oil prices have made their importance to the economy more evident as oil producers start to diversify and move away from reliance on oil as a major source of revenue. Fluctuating oil prices cause enormous pressure on oil corporations’ bottom line, the expansion of non-oil enterprises has. The non-oil sector's profitability strategy is a major challenge for non-oil enterprises looking to contribute to the economy. The study's objective in the context of non-oil firm profitability is to analyse research conducted over the previous two decades to understand the future orientation of non-oil firms in oil-producing nations. We utilised the PRISMA statement ۲۰۲۰ and gathered records from Web of Science and Scopus. The final ۴۶ articles were included for the review, and VOS viewer software was used to categorise the results. This is a comprehensive review exploring profitability of non-oil firms from the contexts of firm size, market share, governance structure and capital management. The paper concludes with suggestions for further research on firm profitability in relation to the economy in which it operates.   The study identified three significant streams: firm size, capital management and profitability. However, results indicate that there would be a positive link between business size and profitability. In addition, capital management is a critical component in maximising firm profitability, and the board of directors is a crucial determinant identified in the research.  Finally, results show that the elements determining profitability remain a significant issue for academics. Not much attention is given to the financial performance of non-oil firms in oil producing economies as the focus would be on firms operating in the country’s major industry. However, fluctuating oil prices have made their importance to the economy more evident as oil producers start to diversify and move away from reliance on oil as a major source of revenue. Fluctuating oil prices cause enormous pressure on oil corporations’ bottom line, the expansion of non-oil enterprises has. The non-oil sector's profitability strategy is a major challenge for non-oil enterprises looking to contribute to the economy. The study's objective in the context of non-oil firm profitability is to analyse research conducted over the previous two decades to understand the future orientation of non-oil firms in oil-producing nations. We utilised the PRISMA statement ۲۰۲۰ and gathered records from Web of Science and Scopus. The final ۴۶ articles were included for the review, and VOS viewer software was used to categorise the results. This is a comprehensive review exploring profitability of non-oil firms from the contexts of firm size, market share, governance structure and capital management. The paper concludes with suggestions for further research on firm profitability in relation to the economy in which it operates.   The study identified three significant streams: firm size, capital management and profitability. However, results indicate that there would be a positive link between business size and profitability. In addition, capital management is a critical component in maximising firm profitability, and the board of directors is a crucial determinant identified in the research.  Finally, results show that the elements determining profitability remain a significant issue for academics.

Keywords:

profitability , non-oil firms , firm size , board of directors , capital management , firm value