Does size matter? On the productivity and profitability of cableway operation

Abstract

This paper discusses the impact of size, measured in turnover on profitability, i.e. EBITDA per turnover, exemplified by one of the leading industries in alpine tour-ism - cableways. It empirically investigates practitioners' as well as scholars' claim according to which the cableway industry could become more productive and prof-itable by consolidation. The results, drawn from multiple types of regressions, show that there is a significant and logarithmic association between size and profitability. From the nature of that association one can conclude that smaller companies are more likely to gain in productivity and profitability from consolidation than larger companies, which have to find other ways to improve their performance.