The Profitability of Afghanistan’s Coal Industry: An ARDL Analysis of the North Coal Enterprise

Document Type : Research Paper

Authors

1 Faculty of Mining and Geological Engineering, Kabul University, Kabul, Afghanistan

2 Faculty of Economics, Emory University, Atlanta, Georgia.

3 Department of Economics, Baghlan University, Baghlan, Afghanistan.

Abstract

This study examines the determinants of profitability in the North Coal Enterprise (NCE), Afghanistan’s only state-owned profit-generating company authorized to operate coal mines. Despite the partial privatization of several collieries, four major mines remain under NCE’s management. Using annual data from 1989 to 2019 obtained from the Ministry of Industries and Mines and the Northern Coal Office, the study employs the ARDL model to estimate short- and long-term relationships between profitability (net profit-to-capital ratio), capital structure (debt-to-capital ratio), and liquidity (current ratio). The findings indicate that sales revenue has a positive long-term impact on profitability, while liquidity has a short-term positive influence. Conversely, capital structure shows a negative relationship with profitability. These results underscore the importance of sound financial management and effective liquidity control in maintaining NCE’s profitability.

Keywords

Main Subjects

References

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Iranian Economic Review
Volume 29, Issue 4
December 2025
Pages 1361-1376

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