Determinants of Financial Performance in Advertising and Marketing Companies: Evidence from Central and Eastern European Countries

Tetiana Zavalii, Serhii Lehenchuk (), Lyudmyla Chyzhevska and Iryna Hrabchuk
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Tetiana Zavalii: Department of Management, Business and Marketing Technologies, Zhytomyr Polytechnic State University, 10005 Zhytomyr, Ukraine
Serhii Lehenchuk: Department of Information Systems in Management and Accounting, Zhytomyr Polytechnic State University, 10005 Zhytomyr, Ukraine
Lyudmyla Chyzhevska: Department of Information Systems in Management and Accounting, Zhytomyr Polytechnic State University, 10005 Zhytomyr, Ukraine
Iryna Hrabchuk: Department of International Relations and Political Management, Zhytomyr Polytechnic State University, 10005 Zhytomyr, Ukraine

JRFM, 2025, vol. 18, issue 3, 1-21

Abstract: The issue of key determinants affecting the financial performance of advertising and marketing companies in Central and Eastern Europe remains understudied, despite the industry’s rapid growth and regional specifics. This study investigates financial performance determinants of advertising and marketing companies in four CEE countries (the Czech Republic, Poland, the Slovak Republic, and Ukraine) during 2021–2023, employing the least absolute deviations method. The study examines three financial performance measures (Return on Assets, Return on Equity, and Operating Profit Margin) using three independent variables (Current Ratio, Debt to Equity, and Total Asset Turnover) and control variables such as Company Size, Leverage, and Company Type. The results show that Total Asset Turnover consistently has a significant positive impact on ROA and ROE across all studied countries. The study also identified significant regional variations in liquidity and capital structure impacts, particularly in the Polish market, and uncovered distinct patterns in how financial leverage affects various performance metrics across the studied countries. Specifically, while leverage shows a predominantly negative relationship with ROE in most countries, it positively influences OPM for Polish, Slovak, and Ukrainian companies, suggesting that the role of financial leverage in company performance is highly context-dependent. The novelty of the study lies in a comprehensive investigation of specific determinants of financial performance in the CEE advertising and marketing sector, revealing the crucial role of efficient asset and equity management in the region.

Keywords: financial performance; advertising and marketing companies; panel data; cross-country analysis; financial management; Central and Eastern Europe; return on assets; return on equity; operating profit margin (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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