Analysis of the Factors that Drive the Profit Change of Communication Enterprises: Based on a Longitudinal Case Study of Huawei

Abstract

Abstract:

In order to explain what causes the profit change in a company, we carry out a quantificative decomposition of profit. By combining the methods of DEA efficiency measurement and profits change decomposition, we illustrate the operation mechanism and basic rule. Based on the related theories and principles, we use the method of case analysis to empirically prove the theoretical framework of profit source. The results show that the quantity effect and price effect of Huawei contribution to profit changes appear alternately in the data sampling period, and the price effect is in the decline. The results confirm that the communications industry competition is increasing year by year. By further decomposing the quantity effect into action effect, effect of technical progress and operation efficiency effect, we deeply explore the potential causes of quantity change and explain the inner mechanism of the corporate profit change.

Key words: profit change, price effect, quantity effect, DEA

Li Yinlong, Xiao Hailin, Fu Guijun. Analysis of the Factors that Drive the Profit Change of Communication Enterprises: Based on a Longitudinal Case Study of Huawei[J]. , 2016, 28(9): 260-272.

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