A COMPARISON OF THE FINANCIAL CHARACTERISTICS OF EUROPEAN AND ASIAN MANUFACTURING FIRMS

Gulser Meric, Carol Welsh, Robert Scarpa and Ilhan Meric
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Gulser Meric: Rohrer College of Business, Rowan University, Glassboro, New Jersey, USA
Carol Welsh: Rohrer College of Business, Rowan University, Glassboro, New Jersey, USA
Robert Scarpa: Rohrer College of Business, Rowan University, Glassboro, New Jersey, USA
Ilhan Meric: Rohrer College of Business, Rowan University, Glassboro, New Jersey, USA

Studies in Business and Economics, 2017, vol. 12, issue 3, 112-125

Abstract: Comparing the financial characteristics of firms in different countries has been a popular research topic in finance. However, general financial characteristics of European and Asian manufacturing firms have never been compared. In this paper, we undertake such a study with the MANOVA (Multivariate Analysis of Variance) technique. Our research uses all European and Asian manufacturing firms included in the Research Insight/Global Vintage database at the end of 2015. Our findings may provide valuable insights for financial managers and global investors. We find that Asian firms tend to have less liquidity risk but more bankruptcy risk compared with European firms. European firms have more efficient accounts receivable management and higher fixed and total assets turnover rates. However, Asian firms have higher inventory turnover and sales growth rates. Return on equity is not significantly different in European and Asian firms. However, Asian firms have significantly higher net profit margin and return on assets compared with European firms.

Keywords: Financial ratios; European and Asian manufacturing firms; MANOVA (Multivariate Analysis of Variance) (search for similar items in EconPapers)
Date: 2017
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