Analysis of Risk Factors Affecting Firms’ Financial Performance—Support for Managerial Decision-Making

Nicoleta Bărbuță-Mișu, Mara Madaleno and Vasile Ilie ()
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Nicoleta Bărbuță-Mișu: Department of Business Administration, “Dunărea de Jos” University of Galati, 800008 Galati, Romania
Mara Madaleno: GOVCOPP—Research Unit in Governance, Competitiveness and Public Policy, Department of Economics, Management, Industrial Engineering and Tourism (DEGEIT), University of Aveiro, 3810-193 Aveiro, Portugal
Authors registered in the RePEc Author Service: Nicoleta Bărbuţă-Mişu

Sustainability, 2019, vol. 11, issue 18, 1-19

Abstract: This paper aims to investigate how financial variables and exogenous crises influence firms’ financial performance, and how these factors may help managers in decision-making to increase their firm’s wealth. The dynamic interactions among variables were studied by applying a panel vector autoregressive model using annual data for a sample of non-financial firms from European countries. Results indicate that liquidity, leverage and productivity positively affect firm performance, while solvency and asset turnover are positive and statistically significant only in the case of return on equity. Labour productivity induces that firms tend to display larger efforts to keep financial performance in face of a crisis, considering that the crisis reveals a negative statistical impact over return on assets.

Keywords: financial performance; return; leverage; liquidity; labour productivity; asset turnover; large companies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:18:p:4838-:d:264151

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